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Transparency is Power: Identification Cards and Food Subsidy Programs in Indonesia

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Presentation by Rema Hanna "Transparency is Power: Identification Cards and Food Subsidy Programs in Indonesia" at the SITE Corruption Conference, 31 August 2015.

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Transparency is Power: Identification Cards and Food Subsidy Programs in Indonesia

  1. 1. Transparency  is  Power:     Iden2fica2on  Cards  and  Food   Subsidy  Programs  in  Indonesia   Rema  Hanna,  Harvard,  NBER,   BREAD  JPAL     Joint  with  Abhijit  Banerjee,  MIT;  Jordan  Kyle,   Columbia  University;    Benjamin  Olken,  MIT;    and   Sudarno  Sumarto,  TNP2K  and  SMERU    
  2. 2. •  Central  governments  have  a  goal  and  design  a   program  accordingly   •  Local  officials  who  implement  the  programs   may  have  incen2ves  that  run  counter  to  the   central  government’s  goal   •  Difficult  for  central  government  to  monitor   local  officials   Principal-­‐agent-­‐ci2zen  problem  
  3. 3. •  Subsidized  food  program  where   the  central  government  sets  the   rules,  but  the  leader:   – Has  leeway  in  implementa2on   – Has  more  informa2on  than   ci2zens  about  program  rules   •  Would  providing  more   informa*on  to  eligible   households  about  the  rules   improve  program  efficiency?   –  Does    form  of  informa2on  maXer?   In  our  context  
  4. 4. •  Background,  Experimental  Design  and  Data   •  Overall  effect  of  iden2fica2on  cards   •  Effect  of  Varying  Level  and  Type  of  Informa2on   •  Conclusions  (and  scale-­‐up)   Outline  
  5. 5. BACKGROUND,  EXPERIMENTAL  DESIGN   AND  DATA    
  6. 6. •  Distributes  15kg  of  subsidized  rice/month  at  a   subsidized  price  of  Rp.  1600/kg  to  over  17   million  eligible  households   – Largest  targeted  social  program:     •  $1.5  billion  per  year  in  subsidies     •  3.4  million  tons  of  rice   •  Distribu2on  run  by  the  village  officials,  who   pick  up  rice  from  sub-­‐district,  distribute  it,  and   collect  the  co-­‐payment   The  Raskin  Program  
  7. 7. •  Targe2ng:    84  percent  of  eligible  bought  some   rice;  67  percent  of  ineligible  did  so  as  well   •  Leakages:    comparing  surveys  to  administra2ve   data  suggests  about  23%  of  rice  disappears   •  Rice-­‐markups:  mean  co-­‐payment  in  our  data  is   Rp.  2,276  per  kg,  instead  of  Rp.  1,600   •  Eligible  households  buy  5.3  kg/month  at  Rp.   2,276:    32  percent  of  value  of  intended  subsidy   Problems  
  8. 8. •  572  villages  in  Indonesia  across  six  districts   (three  provinces)   Experimental  Design  
  9. 9. •  194  villages  status  quo   •  378  villages  randomly  assigned  to  receive   cards   – Cards  included  name,  quan2ty,  and  instruc2ons   – Send  through  mail  service  (although  15%  who   received  it  got  it  directly  from  postman)   •  Within  the  378  card  villages,  we  also  randomly   varied  cards  on  4  dimensions  (discuss  2  due  to   2me  constraints)   Experimental  Design  
  10. 10. Name   Quan2ty  
  11. 11. •  Common  knowledge  facilitate  collec2ve  ac2on?   – Standard:  village  head  gets  list  and  one  copy  posted   – Public:    posted  many  copies  of  list  +  posters   Public  Versus  Private  Informa2on  
  12. 12. •  Control  households   think  that  the  copay   is  25%  higher  than  it   actually  is  and  pay   40%  more  in  reality   •  Test  precisely   whether  varying   informa2on  on  the   cards  maXered   Price  Versus  No-­‐Price  
  13. 13. •  Two  follow-­‐up  surveys:       – About  two  and  eight  distribu2ons  aner  cards  were   mailed  (two  different  hamlets)   – 18  month  results  (complicated  due  to  other   programs  occurring),  but  in  paper  as  well   •  Administra2ve  data  on  eligibility  status   Data  
  14. 14. Outcomeivs  =  β0+  β1Cardsivs  +  αs+δv+εivs       •  Pre-­‐analysis  plan  for  government   •  All  analysis  is  intent  to  treat   •  Conduct  analysis  separately  by  eligibility  status   •  Stack  2  month  and  8  month  observa2ons  in  same   regressions  (effects  similar  across  both)   •  Cluster  by  village   •  Randomiza2on  check  confirms  balance   Empirical  Analysis  
  15. 15. OVERALL  EFFECT  OF  ID  CARDS  
  16. 16. •  Increase  in  cards  for  eligible,  albeit  imperfect   •  Eligible  households  9  percentage  points—or  30   percent—more  likely  to  know  their  status   Do  People  Receive  the  Cards?     Received   Card   Used   Card   Knows  Own   Status       (1)   (2)   (3)   Eligible         Card   0.30***   0.15***   0.09***     (0.02)   (0.02)   (0.02)          Control  Mean   0.07   0.06   0.30          Ineligible         Card   0.03**   0.04***   0.05**     (0.01)   (0.01)   (0.02)          Control  Mean   0.05   0.04   0.36            
  17. 17. B oug ht  las t   two  months Quantity P ric e S ubs idy E ligible C ard 0.02 1.25*** -­‐57*** 7,455*** (0.01) (0.24) (18) (1,328) C ontrol  Mean 0.79 5.29 2,276 28,605 Ineligible C ard -­‐0.06*** 0.07 -­‐35 526 (0.02) (0.19) (24) (1,035) C ontrol  Mean 0.63 3.46 2,251 18,754 •  Subsidy  increases  by  about  ~26%  for  eligible   •  No  overall  decrease  in  quan2ty  for  ineligible   –  Rice  increases  by  17%;  36%  decrease  in    rice  leakage   Effect  of  Cards  on  Raskin?  
  18. 18. •  General  protests  increased   •  Those  who  bought  rice  complained  less;   complaints  about  distribu2on  fell   •  Those  who  did  not  get  to  buy  rice  complained   more,  with  more  complaints  about  targe2ng   Impacts  on  Complaints?   Protest Occurred Bought Rice Did not buy Rice Targeting Distribution Card 0.07*** -0.09*** 0.07*** 0.07*** -0.07** (0.02) (0.03) (0.03) (0.03) (0.03) Mean Control 0.11 0.43 0.22 0.18 0.41 Complaints Occurred Type
  19. 19. E ligible Ineligble C ard 3,175* 205 (1,622) (909) L og  C onsumption 950 -­‐3,107*** (1,078) (651) C ard  x  L og  C onsumption -­‐1,938 -­‐176 (1,573) (798) S ubs idy •  If  distor2ng,  we  should  see  a  shin  from  the   poor,  ineligible  to  the  rich,  eligible   •  But  treatment  effect  of  card,  by  consump2on,   on  subsidy  cannot  be  rejected  from  zero   Undoing  a  “local”  fix  of  Targe2ng?  
  20. 20. •  Eligible  households  receive  26%  larger  subsidy   – This  is  with  only  30  pp  increase  in  cards  –  effect   may  differ  with  larger  penetra2on  of  cards   – Cost  effec2ve:  subsidy  increase  is  more  than  5   2mes  the  cost  of  the  cards  over  the  study  period   •  Poorer  ineligibles  not  hurt  by  cards  –  suggests   that  cards  are  not  undoing  a  local  “fix”  of  a   bad  targe2ng  alloca2on   Summary  
  21. 21. EFFECT  OF  VARYING  LEVEL  AND  TYPE   OF  INFORMATION:       (1)  STANDARD  VS.  PUBLIC   (2)  PRICE  VS.  NO  PRICE      
  22. 22. •  Common  Knowledge:    Cards  provide  individual   informa2on  on  one’s  eligibility  status   –  If  I  want  to  protest,  I  may  need  to  know  if  others   would  join   –  The  village  head  may  need  to  know  that  everyone   “knows”  to  keep  him  in  check   •  Varied  informa2on  about  program:   –  Standard  Informa*on:    List  sent  to  village  head  and   one  poster  with  beneficiary  lists  posted   –  Public  Informa*on:    Posters  for  both  the  full  lis2ng   and  for  cards  (3  posters  per  hamlet)  and  mosque   radio  announcements   1)  Public  Versus  Private  Informa2on  
  23. 23.   Eligible   Ineligible   Village   officials   Informal   Leaders       (1)   (2)   (3)   (4)   Panel  A:  Respondent  has  seen  the  list   Public     0.14***   0.10***   0.24***   0.12***   (0.02)   (0.02)   (0.06)   (0.05)   Standard     0.02*   0.01   0.05   -­‐0.01   (0.01)   (0.01)   (0.05)   (0.04)   Difference:           Public  -­‐  Standard   0.12***   0.10***   0.18***   0.13***     (0.02)   (0.02)   (0.06)   (0.05)            Control  Mean   0.07   0.06   0.36   0.12            Panel  B:    Respondent  correctly  identifies  own  status   Public     0.12***   0.08***   0.25***   0.00   (0.02)   (0.03)   (0.05)   (0.07)   Standard     0.06***   0.01   0.14***   -­‐0.02   (0.02)   (0.03)   (0.05)   (0.07)   Difference:           Public  -­‐  Standard   0.06**   0.07***   0.11**   0.02     (0.03)   (0.03)   (0.05)   (0.07)            Control  Mean   0.30   0.36   0.44   0.48   Greater  Knowledge  with  Public  
  24. 24.   Eligible   Ineligible   Village   officials   Informal   Leaders       (1)   (2)   (3)   (4)   Respondent  believes  that  the  stated  category  of  individuals  has  seen  the  list   Public     0.36***   0.27***   0.24***   0.24***   (0.05)   (0.04)   (0.06)   (0.05)   Standard     0.08**   0.02   0.04   0.05   (0.04)   (0.02)   (0.05)   (0.04)   Difference:           Public  -­‐  Standard   0.28***   0.25***   0.20***   0.19***   (0.05)   (0.04)   (0.06)   (0.05)   Control  Mean   0.31   0.15   1.04   0.47   Respondent  correctly  identifies  status  of  other  households   Public     -­‐0.01   0.01   -­‐0.00   -­‐0.03   (0.01)   (0.01)   (0.03)   (0.04)   Standard     -­‐0.00   0.03**   0.03   0.00   (0.01)   (0.01)   (0.04)   (0.04)   Difference:           Public  -­‐  Standard   -­‐0.00   -­‐0.02   -­‐0.03   -­‐0.04   (0.01)   (0.02)   (0.04)   (0.04)            Control  Mean   0.66   0.32   0.60   0.63   Knowledge  About  Others?  
  25. 25.   Eligible  Households     Ineligible  Households     Bought   in  the   Last  2m   Quantity   Price)   Subsidy       Bought   in  the   Last  2m   Quantity   Price)   Subsidy       (1)   (2)   (3)   (4)     (5)   (6)   (7)   (8)   Public     0.01   1.64***   -­‐81***   9,666***     -­‐0.08***   0.12   -­‐46   764     (0.02)   (0.30)   (26)   (1,703)     (0.03)   (0.24)   (30)   (1,293)   Standard     0.02   0.83***   -­‐24   4,839***     -­‐0.03   0.10   -­‐19   623     (0.02)   (0.31)   (29)   (1,764)     (0.03)   (0.25)   (30)   (1,347)                       Public  -­‐  Standard   -­‐0.01   0.81**   -­‐58**   4,827**     -­‐0.06*   0.02   -­‐27   140     (0.02)   (0.36)   (28)   (2,031)     (0.03)   (0.26)   (30)   (1,419)   Control  Mean   0.79   5.29   2,276   28,605     0.63   3.46   2,251   18,754   •  Public  informa2on  nearly  doubles  the  impact  of   the  cards  for  eligible   •  Effect  on  ineligible  households  driven  by  public   informa2on   Effect  of  Public  on  Subsidy  
  26. 26. •  Part  of  the  impact  is  that  cards  are  more  likely   to  be  distributed  by  6  pp   •  But,  not  enough  to  explain  the  full  impact  of   the  public  info  treatment  on  the  subsidy   – If  you  compute  the  IV  effect  of  receiving  a  card  on   the  subsidy,    it  is  Rp  17,000  in  standard  and  Rp   32,600  in  public  (p-­‐value  of  0.03)   – Suggests  that  public  informa2on  treatment  had   broader  effect  than  just  the  card   Discussion  of  Public  Results  
  27. 27.   Eligible  Households     Ineligible  Households     Bought   in  the   Last  2m   Quantity   Price   Subsidy       Bought   in  the   Last  2m   Quantity   Price   Subsidy       (1)   (2)   (3)   (4)     (5)   (6)   (7)   (8)   Price   0.03   1.17***   -­‐49   6,802***     -­‐0.03   0.12   -­‐43   861     (0.03)   (0.36)   (35)   (2,017)     (0.03)   (0.28)   (34)   (1,555)   No  Price   0.02   0.55   -­‐6   3,200*     -­‐0.03   0.14   18   664     (0.03)   (0.35)   (29)   (1,935)     (0.03)   (0.28)   (32)   (1,514)   Difference:                     Price  -­‐  No  Price   0.01   0.62*   -­‐43   3,602*     -­‐0.00   -­‐0.02   -­‐62**   197     (0.02)   (0.35)   (28)   (1,974)     (0.03)   (0.26)   (28)   (1,436)                       Control  Mean   0.79   5.29   2,276   28,605     0.63   3.46   2,251   18,754   •  Adding  price  to  the  card  increases  the  subsidy  for  eligible   •  Quan2ty  decreases  with  printed  price:       –  If  just  accountability,  we  would  expect  difference  in  price   –  Quan2ty  “bump”  easier  to  give  to  some,  than  having  to  lower   price  for  all   2)  Price  Versus  No  Price  
  28. 28. •  Providing  informa2on  to  ci2zens  reduced   leakages  in  Raskin   – Public  informa2on  nearly  double  subsidy  gain   – Return  to  increased  informa2on  wriXen  on  cards   •  More  broadly,  transparency  could  play  a  role   in  improving  program  func2oning,  but  it  is   important  to  think  about  the  form  of  it   •  Policy  Impact:      in  response  to  vp  request,   influenced  Indonesia’s  card  program   Conclusion  

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