Our indicator for incidence of corruption is whether, upon personally contacting a particular institution, a household was forced to pay a bribe for services that should have been delivered for free. The top panel of table 4 provides descriptive evidence for the aggregate and by expenditure quintile.<sup>11</sup> Not surprisingly, the share of households who have done so varies: Panel 1 illustrates that about two thirds reported to have approached a health institution, about 44% and 40% education or local administration, respectively, and about 22% the police and institutions charged with providing productive services. Poorer households had generally less contact with the institutions of concern.<sup>12</sup> As this may result in selectivity bias, we complement analysis of these households’ actual experience of bribery with the perceived satisfaction with service provision by _all_ households in the sample as discussed in more detail below.

Panels 2 and 3 illustrate that the evidence on corruption is broadly consistent with the ranking of different institutions in the institutional part of the survey: Education emerges as the least corrupt with only 7% of users having had to pay bribes, followed by local administration (15%), health (21%), and productive services (26%).<sup>13</sup> The police emerge as the country’s most corrupt institution - 36% of the households who had contact with them reported that they had to pay a bribe. The median bribe paid varies from USh 3,000 for administrative services to 15,000 for the police.<sup>14</sup> In most cases the share of poor users who had to pay bribes was below average and the amount of bribe paid by them less than for the rich, consistent with some wealth-differentiated access and the finding that administrators discriminate among clients to extract maximum revenue (Svensson 2003).

Rankings of departments in terms of users satisfaction with the services provided, as reported in the second part of the table, suggest that users of health, education, and local administration are most content (6.8, 7.6 and 7.2% “highly” satisfied and 29.1, 38.6, and 24.6% “somewhat satisfied”). By comparison, only 1.8% and 3.3% of the population are “highly” and 9.4 and 12.7% “somewhat” satisfied with police and productive services, respectively. The variation in assessment of institutional quality over the income distribution is more marked than in the case of bribe-paying. For example, less than 2% of the bottom two quintiles are highly satisfied, as compared to 6.4% in the top quintile. Thus, contrary to what one would expect given lower demand for bribes from low-income groups, the poor are consistently less satisfied with the quality of service provision than are the rich, even though the latter pay more bribes. This could imply that many of the poor may not even try to access services because they expect not to be attended or not able to pay the fees needed and that looking at actual bribe payments will thus not be sufficient.<sup>15</sup>

> 11 Here and below, we distinguish education, health, the police, local administration, and institutions to provide productive services (including those under the ministries of economy, agriculture, water, forestry, and land). 12 At least in the case of education, this does not mean that they did not use the services under concern. 13 Survey data indicate that the abolition of user fees in the health sector with effect from March 2001 has been implemented in a relatively effective way, resulting in a significant reduction of the households who reported to have had to pay such fees in the 2002/03 National Household Survey (Deininger and Mpuga, 2004). Unfortunately we do not have data on the incidence of bribe taking before this policy change. The fact that about one fifth of those who used health services reported having to make some (unofficial) payment suggests that, even though governance remains an issue, concerns that the abolition of user fees would cause officials to demand side payments rather than official fees were unfounded. 14 1 US$ is equivalent to about 1,800 USh and that the average daily wage in agriculture is about USh 2,000.

> 15 Future surveys of this type will therefore need to pay more attention to selectivity issues.

11