E-Government and Corruption: Evidence from India

From the Open Government Initiative for data sharing in the United States to the plurilateral Open Government Partnership abroad, online government or “e-government” is an important trend in global public administration.  In addition to improving government efficiency and citizen access, studies suggest that e-government can also facilitate accountability and reduce corruption.  Of course, there is reason to be skeptical as to whether successes of e-government champions such as Estonia and South Korea can translate to developing countries, where resources are more limited and corruption is often most severe.  But a 2009 study that excluded OECD countries found that a significant increase in the services supplied online could account for as much as a 13 percentile improvement in a country’s ranking in the World Bank’s Control of Corruption index, even after controlling for changes in gross domestic product and press freedom.

Two more recent studies, both of which look at data from India, provide a finer-grained understanding of the possibilities and limits of e-government in a large developing nation.

The first, a 2013 study by a group of Harvard, MIT and U. Michigan researchers previously discussed on this blog by Rick, examined 20,000 Indian and 14,000 Indonesian government contracts issued under nationwide road-building programs—long a hotbed of corruption—that had transitioned to electronic procurement systems beginning in the early 2000s.  Under e-procurement, more contracts were bid on by and awarded to firms from outside the region where the tender occurred, making make it tougher for local firms to collude and monopolize the market.  But putting tender notices online didn’t remove vulnerabilities in selection criteria, as procurement officers could still manipulate the technical specifications to favor suppliers in ways that might not be easily detected by an auditor.  As a result, the authors found that online procurement did not measurably reduce the price paid for work—suggesting that bribe payments persist—but it did improve the quality of work, leading to fewer missed deadlines in Indonesia and improved reports from independent auditors in India.

A second paper, by Jennifer Bussell at Berkeley, examined the relationship between corruption and the implementation of India’s National e-Government Plan (NeGP). Launched in 2006, the NeGP aims to establish thousands of Common Service Centers, one-stop shops for citizens to access various public services and administrative tasks. In cross-indexing NeGP implementation with corruption indicators, the author found that states with high corruption both opened fewer CSC’s and offered fewer services at the ones in operation, with a particularly lower likelihood of offering services that Transparency International had identified as having a “high potential for corruption,” such as land registration.  The effect was more pronounced in states with competitive political systems, as opposed to states dominated by a single party.  Bussell suggests that because many state-level party organizations directly or indirectly depend on petty graft opportunities to finance their electoral campaigns, “politicians’ expectations about the threat of more transparent service delivery to established sources of corrupt income” is likely what determines their enthusiasm for e-government.

If corrupt politicians fear e-government, then perhaps that’s reason enough to support it.  But the lesson from both studies is that incentives and opportunities for wrongdoing will remain when moving government online doesn’t eliminate the human component.  Nonetheless, smart process design may narrow the window for misbehavior and require bribe-takers to resort increasingly elaborate measures to evade detection.  In this respect, the real gain from digital government could be the data itself: By tracking large numbers of government transactions, e-government programs will provide fodder for auditors and researchers to identify bottlenecks and distortions that might be associated with corruption.  While we shouldn’t expect change overnight, the possibility of persistent review and remediation may be the most important benefit of online public services.

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