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

Author

Listed:
  • Abhijit Banerjee
  • Esther Duflo
  • Clément Imbert
  • Santhosh Mathew
  • Rohini Pande

Abstract

Can e-governance reforms improve government policy? By making information available on a real-time basis, information technologies may reduce the theft of public funds. We analyze a large field experiment and the nationwide scale-up of a reform to India's workfare program. Advance payments were replaced by "just-in-time" payments, triggered by e-invoicing, making it easier to detect misreporting. Leakages went down: program expenditures dropped by 24 percent, while employment slightly increased; there were fewer fake households in the official database; and program officials' personal wealth fell by 10 percent. However, payment delays increased. The nationwide scale-up resulted in a persistent 19 percent reduction in program expenditure.

Suggested Citation

  • Abhijit Banerjee & Esther Duflo & Clément Imbert & Santhosh Mathew & Rohini Pande, 2020. "E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India," American Economic Journal: Applied Economics, American Economic Association, vol. 12(4), pages 39-72, October.
    • Handle: RePEc:aea:aejapp:v:12:y:2020:i:4:p:39-72
    DOI: 10.1257/app.20180302
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    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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