Introduction Context, intervention and evaluation Results Conclusion Appendix Information Technology, Transparency and Corruption in Public Programs: Evidence from a Large Workfare Program in Bihar, India Cl´ ement Imbert with Abhijit Banerjee, Esther Duflo, Santhosh Mathew and Rohini Pande IGC Growth Week, London, September 2014
Introduction Context, intervention and evaluation Results Conclusion Appendix Motivation • Public Programs in developing countries are often not implemented as they should • Corruption and leakage in funds is a part of the problem. • MNREGS: 40%-60% leakages in 2007-08 (Imbert Papp 2011).
Introduction Context, intervention and evaluation Results Conclusion Appendix Motivation • Public Programs in developing countries are often not implemented as they should • Corruption and leakage in funds is a part of the problem. • MNREGS: 40%-60% leakages in 2007-08 (Imbert Papp 2011). • This is not for lack of trying to reduce corruption: • online documentation of expenditures (nrega.nic.in) + audits. • payments through post-offices and banks mandatory. • leakage down to 20% in 2011-12 (Imbert 2014).
Introduction Context, intervention and evaluation Results Conclusion Appendix Motivation • Public Programs in developing countries are often not implemented as they should • Corruption and leakage in funds is a part of the problem. • MNREGS: 40%-60% leakages in 2007-08 (Imbert Papp 2011). • This is not for lack of trying to reduce corruption: • online documentation of expenditures (nrega.nic.in) + audits. • payments through post-offices and banks mandatory. • leakage down to 20% in 2011-12 (Imbert 2014). • But there are gaps in the system: • Entry delayed and incomplete (only 60% really required). • Accountability mostly through command and control.
Introduction Context, intervention and evaluation Results Conclusion Appendix Information technology and Corruption • Can real time data processing made possible by better information technology reduce corruption? • Mularidharan et al. (2014) find that biometric smart cards to handle payments to beneficiaries “delivered a faster, more predictable, and less corrupt payments process without adversely affecting program access”.
Introduction Context, intervention and evaluation Results Conclusion Appendix Information technology and Corruption • Can real time data processing made possible by better information technology reduce corruption? • Mularidharan et al. (2014) find that biometric smart cards to handle payments to beneficiaries “delivered a faster, more predictable, and less corrupt payments process without adversely affecting program access”. • Our intervention is complementary: we look at the process by which money goes from the State to the Panchayat (before it reaches beneficiaries)
Introduction Context, intervention and evaluation Results Conclusion Appendix Intervention • Status quo: to obtain money the Panchayat sends request to the Block, which sends a request to the district, which delivers the money to the Panchayat’s account • New system: the Panchayat enters worker payments details and uploads them to the server, and that immediately generate a transfer to the Panchayat account. • A “full scale” experiment: • intervention rolled out by the Bihar Government in 12 districts (covering 33 million rural people). • we randomly selected one third of the blocks in each of these districts to receive the new system.
Introduction Context, intervention and evaluation Results Conclusion Appendix Fund Flow in Control St Status tus ¡ ¡Qu Quo State ¡Pool ¡in ¡Central ¡Bank ¡of ¡India ¡ ¡ Fund ¡Request ¡ 3 Fund ¡Transfer ¡ CPSMS ¡ ¡ District ¡ Access ¡ 4 2 Block ¡ 5 1 Panchayat ¡ Panchayat ¡ Savings ¡Account ¡
Introduction Context, intervention and evaluation Results Conclusion Appendix Fund Flow in Treatment (Labor Payments only) In Inter erven en'on on State ¡Pool ¡in ¡Central ¡Bank ¡of ¡India ¡ ¡ ¡ Fund ¡Request ¡ Fund ¡Transfer ¡ 2 1 Panchayat ¡ CPSMS ¡ ¡ Savings ¡ Panchayat ¡ Access ¡ Account ¡
Introduction Context, intervention and evaluation Results Conclusion Appendix Parsing the intervention • 1. The intervention makes it more difficult/dangerous to cheat • In the regular system, entry into nrega.inc is delayed and incomplete: only 60% of expenditures are accounted for. • In the new system, entry must correspond to a name/days worked: it becomes immediately possible to audit. • Audits are few and far between but they do carry large penalties (prison).
Introduction Context, intervention and evaluation Results Conclusion Appendix Parsing the intervention • 1. The intervention makes it more difficult/dangerous to cheat • In the regular system, entry into nrega.inc is delayed and incomplete: only 60% of expenditures are accounted for. • In the new system, entry must correspond to a name/days worked: it becomes immediately possible to audit. • Audits are few and far between but they do carry large penalties (prison). • 2. The intervention also changes who can takes a cut: • In the regular system, cheating is done by the lower level. The block level and district levels are in a position to collect a tax. • In the new system, the district level is entirely cut out. The block level remains critical because it has the infrastructure to access the system.
Introduction Context, intervention and evaluation Results Conclusion Appendix Sample 12 Districts 69T 126C Blocks 1002T 2029C Panchayat
Introduction Context, intervention and evaluation Results Conclusion Appendix Data sources • On MGNREGS expenditures: • CPSMS: financial transactions from all Panchayat savings account. • MIS: monitoring system of the Ministry of Rural Development.
Introduction Context, intervention and evaluation Results Conclusion Appendix Data sources • On MGNREGS expenditures: • CPSMS: financial transactions from all Panchayat savings account. • MIS: monitoring system of the Ministry of Rural Development. • On MGNREGS employment and works: • Household survey: 9500 households in 195 blocks, May – July 2013. • Survey of 4165 MGNREGS asset randomly sampled from nrega.nic.in.
Introduction Context, intervention and evaluation Results Conclusion Appendix Data sources • On MGNREGS expenditures: • CPSMS: financial transactions from all Panchayat savings account. • MIS: monitoring system of the Ministry of Rural Development. • On MGNREGS employment and works: • Household survey: 9500 households in 195 blocks, May – July 2013. • Survey of 4165 MGNREGS asset randomly sampled from nrega.nic.in. • On politicians and bureaucrats: • Mukhiyas interview in each surveyed village. • Asset declaration of all MNREGS employees.
Introduction Context, intervention and evaluation Results Conclusion Appendix Timeline • July 2012: Preparation (prepare infrastructure)
Introduction Context, intervention and evaluation Results Conclusion Appendix Timeline • July 2012: Preparation (prepare infrastructure) • Sept 1st 2012: Launch • Sept 18th: State Pool runs dry. • Dec 11th: State Pool replenished. • Dec 15th: Strike of Panchayat Personnel
Introduction Context, intervention and evaluation Results Conclusion Appendix Timeline • July 2012: Preparation (prepare infrastructure) • Sept 1st 2012: Launch • Sept 18th: State Pool runs dry. • Dec 11th: State Pool replenished. • Dec 15th: Strike of Panchayat Personnel • April 1st 2013: Intervention is rolled back. • May 15th - July 15th 2013: Endline survey
Introduction Context, intervention and evaluation Results Conclusion Appendix Expenditures (CPSMS data)
Introduction Context, intervention and evaluation Results Conclusion Appendix Weeks worked (Households) Source: Household survey (May-July 2013)
Introduction Context, intervention and evaluation Results Conclusion Appendix Results Summary • Drop in Expenditure (about 25%) =0.25 million per Panchayat. • Drop in number of days worked and payments according to official data. • No drop in number of days worked or payments according to households. • No decline in asset built according to official reports and found in the field.
Introduction Context, intervention and evaluation Results Conclusion Appendix Results Summary • Drop in Expenditure (about 25%) =0.25 million per Panchayat. • Drop in number of days worked and payments according to official data. • No drop in number of days worked or payments according to households. • No decline in asset built according to official reports and found in the field. • Where is the missing missing money?
Introduction Context, intervention and evaluation Results Conclusion Appendix Liquid Assets of NREGA functionaries [partial data] Log liquid assets During * Treatment Group -0.109 -0.114 (0.185) (0.203) After * Treatment Group -0.253** -0.322** (0.126) (0.132) During * Block Employee 0.650*** (0.116) After * Block Employee 0.362** (0.156) During * Treatment * Block Employee 0.00467 (0.205) After * Treatment * Block Employee 0.364* (0.217) Observations 2,746 2,746
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