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  3. American Economic Journal: Applied Economics
  4. October 2020
  5. E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India

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

  • Abhijit Banerjee
  • Esther Duflo
  • Clément Imbert
  • Santhosh Mathew
  • Rohini Pande
American Economic Journal: Applied Economics
vol. 12, no. 4, October 2020
(pp. 39-72)
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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.

Citation

Banerjee, Abhijit, Esther Duflo, Clément Imbert, Santhosh Mathew, and 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, 12 (4): 39-72. DOI: 10.1257/app.20180302

Additional Materials

JEL Classification

  • C93 Field Experiments
  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
  • O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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