Institutional Affiliation: IFPRI
|Contracting out the Last-Mile of Service Delivery: Subsidized Food Distribution in Indonesia|
with Abhijit Banerjee, Rema Hanna, Benjamin A. Olken, Sudarno Sumarto: w21837
Outsourcing government service provision to private firms can improve efficiency and reduce rents, but there are risks that non-contractible quality will decline and that reform could be blocked by vested interests exactly where potential gains are greatest. We examine these issues by conducting a randomized field experiment in 572 Indonesian localities in which a procurement process was introduced that allowed citizens to bid to take over the implementation of a subsidized rice distribution program. This led 17 percent of treated locations to switch distributors. Introducing the possibility of outsourcing led to a 4.6 percent reduction in the markup paid by households. Quality did not suffer and, if anything, households reported the quality of the rice improved. Bidding committees may hav...
|The Power of Transparency: Information, Identification Cards and Food Subsidy Programs in Indonesia|
with Abhijit Banerjee, Rema Hanna, Benjamin A. Olken, Sudarno Sumarto: w20923
Can governments improve aid programs by providing information to beneficiaries? In our model, information can change how much aid citizens receive as they bargain with local officials who implement national programs. In a large-scale field experiment, we test whether mailing cards with program information to beneficiaries increases their subsidy from a subsidized rice program. Beneficiaries received 26 percent more subsidy in card villages. Ineligible households received no less, so this represents lower leakage. The evidence suggests that this effect is driven by citizen bargaining with local officials. Experimentally adding the official price to the cards increased the subsidy by 21 percent compared to cards without price information. Additional public information increased higher-orde...