Improving the Impact of the National Rural Employment Guarantee Scheme by Identifying Corruption and Reducing Leakages in its Electronic Payment Scheme

Electronic payment technologies are currently being heralded as a panacea to corruption in public programs since, in theory, when cash benefits are transferred directly to beneficiaries, opportunities for leakage can be dramatically reduced. But while new evidence has shown that electronic payments are beneficial, they are not a cure-all for corruption in government programs (Muralidharan et al 2014). In particular, different design features of electronic payment schemes have wide-ranging impacts on leakages and on beneficiary welfare. We propose to use an ongoing randomized control trial to (a) provide some of the first rigorous evidence of how women in particular – both within the household and in relationship to the local government - are affected by payment technologies intended to reduce graft and (b) trace the financial costs of corruption that design different features promote by carefully and systematically tracking fund movements between the central, state, local governments, the banks, and beneficiaries.