Economic Development Seminar

Having It at Hand: How Small Search Frictions Impact Bureaucratic Efficiency

Can small search costs that constrain information acquisition and monitoring across the administrative hierarchy provide an explanation for poor bureaucratic performance in the developing world? In collaboration with the Indian Ministry of Rural Development and two state governments, we conducted a field experiment in which a random sample of bureaucrats were provided access to an internet- and mobile-based management and monitoring platform for wage payments associated with the world's largest workfare program (MGNREGA), which suffers from serious payment delay problems. The platform lowered costs of accessing information about the status of pending payments and identifying subordinate employees who need to act. Our experiment also randomly varied which level of the administrative hierarchy had e-platform access – senior and/or intermediate managers. Overall, we find delays are significantly reduced across all treatment arms in areas with worse pre-period delays. We also find that usage of the e-platform within a given level of the hierarchy is significantly impacted by whether the other level of the hierarchy receives concurrent access. The delay reductions achieved through usage of the tool point to the potential for service delivery improvements enabled by technology now widely available in capacity-constrained settings.