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.
Banerjee, Abhijit, Esther Duflo, Clément Imbert, Santhosh Mathew, and Rohini Pande.
"E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India."
American Economic Journal: Applied Economics,
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements