This issue of capture of public goods is sadly too common. It was interesting to hear about low cost private schooling offered by Bridge International academies in Kenya and how the poor see this as the path forward for their children rather than poorly performing government schools. Cash transfers to the poor (school vouchers) would increase the competition, and one hopes make government schools better performing. Link to the NPR story is here http://www.npr.org/2013/11/13/244947834/chain-of-low-cost-schools-open-in-kenya.
A functioning public information and disclosure would no doubt lead to increased transparency, especially where scarce public resources like public housing are purported to be given to poor etc. In the past, whenever a government agency made such allocations, a good number always went to the well connected.