Information Bypass: Using Low-cost technological innovations to curb leakages in welfare programs


Distribution networks entrusted to run welfare programs can have enduring leakages due to the expensive monitoring of agents at several echelons. This paper features a technological innovation harnessing low-cost computing that can help to curb leakages and reduce inefficiencies in such complex welfare distribution networks. A phone-based ‘Interactive Voice Response System’ that requires the last-mile distribution agents to report the number of beneficiaries at a very high frequency concurrently with business-as-usual beneficiary information reporting by the middle-tier delivery agents serves as a mechanism for increasing accountability. Using the roll-out of this system, we demonstrate that this innovation reduced leakage in school lunch provision in Bihar, India. While independently collected data highlights improvements in delivery, official statistics indicate a decline in the school lunches provision. We use within Bihar cellular towers location to bolster our identification in an instrumental variable framework.

Journal of Development Economics, Volume 164, pp. 103137