Efficacy of Top down audits and Community Monitoring

In this paper we survey the recent literature on top down audits and community monitoring. Whilein the case of top down audits the efficacy of audits depends on the type of punishment- electoral punishmentvs legal punishment, the literature finds that electoral punishment is less effective than legalpunishment. Moreover, electoral punishment depends on whether voters are aware of audit reports.The type of service being audited - the opportunity for corruption and the clarity of rules and regulationseffect the success of audits. However, even when top down audits succeed in cutting down corruption,they may not always lead to better outcomes. Social audits are effective when collective actionproblems are less salient e.g. when groups are homogeneous, when the design is such that communityparticipants feel empowered e.g. through elections to the monitoring committee, information is notuseful by itself unless accompanied by tools to influence outcomes, and finally there is not a clear mapbetween finding corruption and improving ultimate outcomes. We suggest that a fertile area for futureresearch is the design of optimal audit schemes that take account of the opportunities for corruptionand the motivations of both the providers and the auditors.