Working Paper: NBER ID: w20923
Authors: Abhijit Banerjee; Rema Hanna; Jordan C. Kyle; Benjamin A. Olken; Sudarno Sumarto
Abstract: Can governments improve aid programs by providing information to beneficiaries? In our model, information can change how much aid citizens receive as they bargain with local officials who implement national programs. In a large-scale field experiment, we test whether mailing cards with program information to beneficiaries increases their subsidy from a subsidized rice program. Beneficiaries received 26 percent more subsidy in card villages. Ineligible households received no less, so this represents lower leakage. The evidence suggests that this effect is driven by citizen bargaining with local officials. Experimentally adding the official price to the cards increased the subsidy by 21 percent compared to cards without price information. Additional public information increased higher-order knowledge about eligibility, leading to a 16 percent increase in subsidy compared to just distributing cards. In short, increased transparency empowered citizens to reduce leakages and improve program functioning.
Keywords: Transparency; Food Subsidy Programs; Indonesia; Randomized Controlled Trials
JEL Codes: D73; I38; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increase in subsidies from a subsidized rice program (H29) | More rice received by eligible households (F35) |
| Mailing identification cards to beneficiaries (L87) | Reduction in leakage (L15) |
| Increase in subsidies from a subsidized rice program (H29) | Complaints from ineligible households (D19) |
| Additional public information (H49) | Higher-order knowledge about eligibility (D80) |
| Increased transparency (G38) | Empowerment of citizens to reduce leakages (O17) |
| Increased transparency (G38) | Improvement in program functioning (C88) |
| Mailing identification cards to beneficiaries (L87) | Increase in subsidies from a subsidized rice program (H29) |
| Official price on cards (D41) | Increase in subsidy (H23) |
| Higher-order knowledge about eligibility (D80) | Increase in subsidy (H23) |