Identity Verification Standards in Welfare Programs: Experimental Evidence from India

73 Pages Posted: 11 Feb 2020

See all articles by Karthik Muralidharan

Karthik Muralidharan

University of California, San Diego (UCSD)

Paul Niehaus

University of California, San Diego (UCSD)

Sandip Sukhtankar

University of Virginia - Department of Economics

Date Written: February 2020

Abstract

How should recipients of publicly-provided goods and services prove their identity in order to access these benefits? The core design challenge is managing the tradeoff between Type-II errors of inclusion (including corruption) against Type-I errors of exclusion whereby legitimate beneficiaries are denied benefits. We use a large-scale experiment randomized across 15 million beneficiaries to evaluate the effects of more stringent ID requirements based on biometric authentication on the delivery of India's largest social protection program (subsidized food) in the state of Jharkhand. By itself, requiring biometric authentication to transact did not reduce leakage, slightly increased transaction costs for the average beneficiary, and reduced benefits received by the subset of beneficiaries who had not previously registered an ID by 10%. Subsequent reforms that made use of authenticated transaction data to determine allocations to the program coincided with large reductions in leakage, but also significant reductions in benefits received. Our results highlight that attempts to reduce corruption in welfare programs can also generate non-trivial costs in terms of exclusion and inconvenience to genuine beneficiaries.

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Suggested Citation

Muralidharan, Karthik and Niehaus, Paul and Sukhtankar, Sandip, Identity Verification Standards in Welfare Programs: Experimental Evidence from India (February 2020). NBER Working Paper No. w26744. Available at SSRN: https://ssrn.com/abstract=3535334

Karthik Muralidharan (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Paul Niehaus

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Sandip Sukhtankar

University of Virginia - Department of Economics ( email )

237 Monroe Hall
P.O. Box 400182
Charlottesville, VA 22904-418
United States

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