E-Governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India

52 Pages Posted: 11 Nov 2016 Last revised: 21 Sep 2017

See all articles by Abhijit V. Banerjee

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics

Esther Duflo

Massachusetts Institute of Technology (MIT) - Department of Economics; Abdul Latif Jameel Poverty Action Lab (J-PAL); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Bureau for Research and Economic Analysis of Development (BREAD)

Clement Imbert

University of Warwick

Santhosh Mathew

Ministry of Rural Development

Rohini Pande

Yale University - Economic Growth Center

Multiple version iconThere are 3 versions of this paper

Date Written: October 27, 2016

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: Transparency, Financial Reform, Leakage, Audits, Workfare

JEL Classification: H11, O2

Suggested Citation

Banerjee, Abhijit V. and Duflo, Esther and Imbert, Clement and Mathew, Santhosh and Pande, Rohini, E-Governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India (October 27, 2016). MIT Department of Economics Working Paper No. 16-09. Available at SSRN: https://ssrn.com/abstract=2867669 or http://dx.doi.org/10.2139/ssrn.2867669

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
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Cambridge, MA 02142
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Esther Duflo (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-544
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617-258-7013 (Phone)
617-253-6915 (Fax)

Abdul Latif Jameel Poverty Action Lab (J-PAL) ( email )

Cambridge, MA
United States

HOME PAGE: http://www.povertyactionlab.org/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Bureau for Research and Economic Analysis of Development (BREAD) ( email )

Duke University
Durham, NC 90097
United States

Clement Imbert

University of Warwick ( email )

Santhosh Mathew

Ministry of Rural Development ( email )

New Delhi, 110001
India

Rohini Pande

Yale University - Economic Growth Center ( email )

Box 208269
New Haven, CT 06520-8269
United States

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