Working Paper: NBER ID: w22803
Authors: Abhijit Banerjee; Esther Duflo; Clement Imbert; Santhosh Mathew; Rohini Pande
Abstract: In collaboration with the Government of Bihar, India, we conducted a large-scale experiment to evaluate whether transparency in fiscal transfer systems can increase accountability and reduce corruption in the implementation of a workfare program. The reforms introduced electronic fund-flow, cut out administrative tiers, and switched the basis of transfer amounts from forecasts to documented expenditures. Treatment reduced leakages along three measures: expenditures and hours claimed dropped while an independent household survey found no impact on actual employment and wages received; a matching exercise reveals a reduction in fake households on payrolls; and local program officials’ self-reported median personal assets fell.
Keywords: E-Governance; Corruption; Accountability; Public Programs; India
JEL Codes: H11; O2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Fund flow reform (E50) | Reduction in expenditures (H59) |
| Fund flow reform (E50) | Decrease in leakages (F32) |
| Decrease in leakages (F32) | Decline in reported expenditures (H59) |
| Decrease in leakages (F32) | Reduction in number of workers hired (J63) |
| Fund flow reform (E50) | Reduction in ghost workers (J63) |
| Reduction in ghost workers (J63) | Fewer unmatched households (R20) |
| Fund flow reform (E50) | Decline in corruption (H57) |
| Fund flow reform (E50) | Improved monitoring and accountability (H83) |
| Improved monitoring and accountability (H83) | Enhanced efficiency of fund flows (G23) |
| Enhanced efficiency of fund flows (G23) | Reduced opportunities for rent-seeking behavior (D72) |
| Fund flow reform (E50) | Delays in payments to beneficiaries (H55) |