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

Abhijit Banerjee, Esther Duflo, Clement Imbert, Santhosh Mathew, Rohini Pande

NBER Working Paper No. 22803
Issued in November 2016
NBER Program(s):Development Economics

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.

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Document Object Identifier (DOI): 10.3386/w22803

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