Skills training, corruption and organisational capabilities: an analysis of Bangladesh’s garment industry

Abstract

Skills training programmes are critical for job creation and structural transformation in developing countries. However, they often achieve poor results because of corruption. What is worse, outcome-based reward schemes create incentives for providers to fraudulently overstate trainee placements, hiding the source of the problem. The research informing this journal article tests the hypothesis that providers supplying lower-capability firms and very high-capability firms are compelled to engage in higher levels of fraud. Based on these insights gained from the qualitative study, the paper suggests that the interrelationship between firm capabilities and the productivity gains achieved through skills training is at the heart of the problem that drives both the low success rates of skills programmes as well as fraud and corruption by skills providers.