Community corruption: not only governments!

Pyjama Samsara, one of my favorite blogs by a development worker, has an excellent post on community corruption in Indonesia. She describes how village leaders stole money helped by those working with the development agency. Here's the story of why one village chief stole the money:

I have had to caution kepala desa (village chief) after kepala desa for taking money they are not entitled to. One kepala desa said that we forced him to be fraudulent by giving such small grants. So his wife had to take seven grants (six of them illicitly) so that she could buy a fridge! How else could she afford to get a fridge! It never once occured to him that our purpose was not to buy her a fridge. No one else in her village has a fridge. Why should we help her get one?

It might be incomprehensible that people would steal the money allocated to improve their lives, like building schools and health clinics but this is what happens. And it happens elsewhere in the world, for example, at elections in Pakistan and Philippines - and elsewhere - community leaders would sell their votes of the community to the highest bidder without any regard for which candidate is more likely to develop their village and build schools and roads.

I don't think it's a problem of ignorance or lack of education as some might argue, people generally figure out what's good for them. So why?