trust in the judicial system and in the government, and the citizen’s knowledge of mechanisms to report a corrupt act. Table A.0 in the Appendix provides a detailed list of the questions used to construct these governance measures at the household level.

Our dependent variable at the individual level is constructed using a survey question that evaluates whether households in need of a service (based on a list of 13 public institutions) decided not to use it<sup>9</sup> . Using on this question, we construct two alternative dependent variables at the household level:

- DIS1, discouraged in at least one institution, is a dummy variable that takes value one if household reports to be discouraged in one or more than one institution, and takes value zero if the household did not mark any of the institutions; and

- DIS2, discouraged in at least two institutions, is a dummy variable equal to one if household reports to be discouraged in two or more than two institutions, and zero if household is discouraged in one or zero institutions.

A data problem has to be noted at this stage. The coding of the survey question on discouragement does not distinguish non-respondents from non-discouraged households, that is, households with none public institution selected. We choose to classify these households as non-discouraged households (impute a zero in variables DIS1 and DIS2). This choice can bias our results. Thus, we decide to infer the size of the non-respondent in our sample and quantify the potential bias due to the incidence of non-response in the following way. We focus on two questions – about the degree of honesty/dishonesty of the public institutions from the household survey and the quality of public service – and analyze the level of non-response in these cases. These questions include a similar list of public agencies as the question on discouragement. Our assumption is that individual respondents are as likely to answer the question on honesty of institutions and quality of public services as the question on discouragement.

Table 3.0 summarizes our results. We observe that on average 5.7 percent of the households did not answer the questions on the degree of honesty/dishonesty of institutions. The higher incidence of non-response corresponds to “Direccion Nacional de Inmigraciones” and “Banco de la Nación”, hence, the results for these public institutions are likely to be the most affected by non-response bias. Table 3.0 also reports the percentage of non-response for the questions on the quality of specific public services. We observe that the average non-response for these questions is less than 1 percent, with only 2 or 3 households on average that did not answer. This second set of questions shows a higher response rate for specific public services than the questions on dishonesty of the institutions. In general, we observe that the non-response rate is less than 6 percent. Thus, we should expect that the actual non-response rate for the discouragement variable to be similar. We will, however, take these considerations into account when we interpret the results.

# <Table 3.0 around here>

The agency-level analysis is based on information on 1123 public officials. The unit of observation is the agency _j_ in region _k_ . The agency-level analysis follows the approach introduced by Kaufmann, Mehrez and Gurgur’s (2002) work for Bolivia using similar survey data. This approach allows us to minimize respondents’ bias and measurement error due to individual differences in perceptions using factor analysis technique. We constructed several

> 9 The exact question reads: ¿En cuáles de las siguientes instituciones (MOSTRAR TARJETA) dejó de hacer trámites que debió o pudo haber realizado?

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