Broader Gains To Digitalization: Public Goods (MNS - Smartcards, PDS/Aadhar , Field (social norms on women), Barnwal (LPG Subsidy) Flashcards
Muralidharan, Niehaus, Sukhtankar (MNS)
Randomise rollout of smartcards to see impacts on LEAKAGES AND CORRUPTION.
Remember by Messi Suarez Neymar for smartcards
Findings on smartcard adoption
Little adoption, and even if adopt, people may not actually use it.
(Different Higgins where rapid large scale rollout, caused large adoption, compared to this small slow adoption)
Smartcard payment experience (2)
Payments disbursed faster
Payments more predictable (less variability in payment days)
So good!
Findings in program leakage
Lower leakages (so less corruption)
Main pro of study
First order stochastic dominance - everyone is improving their lives (UNLIKE HIGGINS WHERE SUPERMARKETS LOST PROFITS WHILE CORNER SHOPS BENEFITED FROM THE DEBIT CARDS IN MEXICO)
Less leakages and corruption (less over-reporting money)
New case:
MNS also explored Aadhaar: why was it controversial
1 pro, 2 cons
It is a biometric ID rollout to 1.24bn people, 91% of population in India
Pro: reduces corruption and leakages
However undermines right to life, poor people like beggars are registered doing nothing, so excluded from the system since cannot have an ID since do not have an address etc.
Also privacy concerns
(SO CONTROVERSIAL WHETHER FULL DIGITALISATION IS GOOD)
MNS also studied PDS: what is the PDS is India
Public distribution system: government provide subsidised food grains
What was the problem with PDS?
High rates of leakages (42%!)
E.g dealers steal grains for themselves n sell on normal markets.
2 phases of digitization in this case to prevent this high leakage (42%!)
Aadhar authentication for each transaction - prove you are entitled to the grain, and the correct amount.
Reconciliation - government track disbursal properly to ensure distributed properly
2 ways it can reduce leakages
Cannot divert to transfers in the name of people who don’t claim (ghosts) since Aadhar authentication required.
Increase bargaining power of beneficiaries, as without authentication dealers wont get future disbursals (so have to SELL to beneficiaries)
2 potential adverse impacts (2)
Dealers may pass on squeezed rents by reducing quantities transferred to those who do seek benefits e.g saying goods are spoilt
Bargaining power effect could actually strengthen dealer
Summary of results MNS for PDS (3)
Authentication (ABBA) had no impact, despite less ghosts, since dealers would still try squeeze rents (claiming spoilt goods)
Increased transaction costs for beneficiaries (e.g dealer would say scales broken so have to make multiple trips)
Increased probability of not getting any benefits by 2.4%
(So digitalisation through authenticiation wasn’t that good)
MNS summary findings
Control group was better than the treatment (with ABBA and reconciliation) !!!
19% drop in disbursed value for controls 78% of which fall in leakage.
compared to 37% in treatment, 66% drop in leakage.
(Contrary to predictions)
Why was this?
Shadow costs of attempting to control corruption, were higher than direct costs.
While ghosts fell (good) , dealers passed on rent squeeze e.g claiming spoilt goods, so eliminated benefits of ABBA etc, making transaction costs for beneficiaries increase, and increased P of getting benefits by 2.4% as mentioned!!)
Field et al: FPRST : Women wage control
Scheme offered 100 days of work at a fixed wage to any household that requests employment.
Linked to the gender take up of bank accounts:
Experiment to see the control of wages women have, since payments were transferred to bank accounts, and most bank accounts were owned by a male household head, and so women have little control over their money
