DP11761 E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India
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