poor governance penalizes households twice: first, it increases the costs of the services especially for the poorest citizens; and second, it may limit access to public service.

<Table 2.2 around here> Misuse of public resources by officials for private gain may indeed promote uneven access or act as a barrier to entry for citizens, especially the poorest ones. In this framework, two main questions arise:

- Why would households be discouraged to seek a public service?

- Why would public officials have any incentive to exclude some individuals from the use of the public service that their agency provides?

Our approach to answer these two questions proceeds in stages in an attempt to exploit the richness of the data available from the two surveys of users and public officials. We begin in this Section by concentrating on the possible link between the users’ behavior and institutional quality of the agency providing the service needed. We then complement our analysis focusing in Section 7 on the public officials only and exploring the link between access and institutional quality of the agency where the official works.

To answer our first question, namely why households may choose not to obtain a public service, we focus our analysis on the users and their decision of whether or not to seek a service when needed.<sup>7</sup> This decision can be affected by both the individual characteristics of the users and the quality of governance of the agency providing the service.

The individual characteristics of users can affect her/his decision not to seek a public service when needed. Income, for example, can affect user’s decision to seek a public service. Poorer users may be less aware of their rights than wealthier ones and may not know where to go to file a complaint or to obtain a better service. In addition, wealthier users can use their income to increase their ability to obtain a service. Thus, we should observe a positive relationship between income and number of discouraged users. Education can also affect the user’s decision. Awareness of her/his rights is likely to be higher for more educated people. Thus, we expect the number of reported discouraged users to increase with the level of education. Age, gender and nationality of the user may also play a role and are included in our analysis.

The individual characteristics of the users are not however the only factors affecting the decision not to seek a public service when needed. The quality of governance of the agencies providing the services can also contribute to discourage users from seeking a public service. We include a few dimensions of governance at the household’s level: the perceived honesty/dishonesty of public institutions, the degree of trust in government institutions, and the citizen’s knowledge of mechanisms to report a corrupt act.

> 7 We realize that in our analysis we should take into account the degree of necessity of a service.  It could be the case, for example, that households do not use a service because they do not need it. In an ideal world we would have data to distinguish between two situations: (i) when a user needed a service and he obtained it, and (ii) when someone did not need a service. The data we have allows only distinguishing people who needed a service and did not receive from all the other cases.  We do not believe however that this introduces a significant bias in our results. Ideally, we would have only data from users that needed a service, and classify them in two groups: the ones that get it and the ones that decide not to get it. In our dataset, instead, we have also data from users who did not need the service. Thus, our results could be biased toward zero, meaning that significant coefficients should be interpreted as the lower bound of the “true” effect.

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