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

Author(s): Abhijit Banerjee, Esther Duflo, Clément Imbert, Santhosh Mathew and Rohini Pande

Publication Date: January 2017

Keyword(s): audits, financial reform, leakage, transparency and workfare

Programme Area(s): Development Economics

Abstract: In collaboration with the Government of Bihar, India, we conducted a large-scale experiment to evaluate whether transparency in fiscal transfer systems can increase accountability and reduce corruption in the implementation of a workfare program. The reforms introduced electronic fund-flow, cut out administrative tiers, and switched the basis of transfer amounts from forecasts to documented expenditures. Treatment reduced leakages along three measures: expenditures and hours claimed dropped while an independent household survey found no impact on actual employment and wages received; a matching exercise reveals a reduction in fake households on payrolls; and local program officials' self-reported median personal assets fell.

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Bibliographic Reference

Banerjee, A, Duflo, E, Imbert, C, Mathew, S and Pande, R. 2017. 'E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India '. London, Centre for Economic Policy Research. http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11761