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Information and Corruption: The National Rural Employment Guarantee Scheme in India


  • Shylashri Shankar


  • Raghav Gaiha
  • Raghbendra Jha



The impact of information on corruption and effective implementation is Janus faced. In this paper we use household level data to address the issue of corruption in the NREG program in three states: Rajasthan, Andhra Pradesh and Maharashtra. We discover that at the entry level, information about the NREG has the effect of increasing the entry of non-poor while the acutely poor, who possessed neither TVs nor cell-phones, nor attended public meetings nor were connected to social networks did not know and therefore did not participate in the program. At implementation level, information enabled those who possessed it to avoid being shortchanged by the administration. The non-poor benefited more from the NREG in all three states, and the ethnographic evidence from Andhra Pradesh and Maharashtra shows that the non-poor even misused the program. So, information has generated corruption on the part of some informed beneficiaries. Conversely, in areas where poorer and illiterate participants are in greater numbers, they are likely to experience more corruption from government officials during the implementation because they possess less information on the benefits accruing to a participant in the NREG. The picture from Rajasthan shows that, while the entry level capture by the non-poor is relatively low, compared to the other two states, the corruption at the level of implementation is higher. Here, lack of information on the part of the beneficiary reduces the monitoring potential and effective implementation and enables corruption. Social networking (and the access to information) increases the likelihood of participation by the affluent but decreases the likelihood of participation by non-affluent and the poor. This implies that the non-affluent are not able to act even if they have information. We need to explore this result further. The results from the three states back the rationale for the importance of a right to information and suggests that the government should invest more in advocacy campaigns about their programs, particularly in the poorest areas. At the same time, it is important to carry out periodic information drives among the beneficiaries to ensure that they are aware of the components of the scheme. However, while these measures may not stop the non-poor from benefiting at the expense of the poor, they might introduce better monitoring of the programs by the poor.

Suggested Citation

  • Shylashri Shankar & Raghav Gaiha & Raghbendra Jha, 2010. "Information and Corruption: The National Rural Employment Guarantee Scheme in India," ASARC Working Papers 2010-02, The Australian National University, Australia South Asia Research Centre.
  • Handle: RePEc:pas:asarcc:2010-02

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    Cited by:

    1. Dwayne Benjamin & Loren Brandt & John Giles, 2011. "Did Higher Inequality Impede Growth in Rural China?," Economic Journal, Royal Economic Society, vol. 121(557), pages 1281-1309, December.
    2. Bet Caeyers, 2014. "Peer effects in development programme awareness of vulnerable groups in rural Tanzania," CSAE Working Paper Series 2014-11, Centre for the Study of African Economies, University of Oxford.
    3. repec:oxf:wpaper:wps/2014-11 is not listed on IDEAS

    More about this item


    National Rural Employment Guarantee Program; Corruption; Information;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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