Information and Corruption: The National Rural Employment Guarantee Scheme in India

The impact of information on corruption and effective implementation is Janus faced. In this
paper we use household level data to address the issue of corruption in the NREG program in
three states: Rajasthan, Andhra Pradesh and Maharashtra. We discover that at the entry
level, information about the NREG has the effect of increasing the entry of non-poor while
the acutely poor, who possessed neither TVs nor cell-phones, nor attended public meetings
nor were connected to social networks did not know and therefore did not participate in the
program. At implementation level, information enabled those who possessed it to avoid being
shortchanged by the administration. The non-poor benefited more from the NREG in all three
states, and the ethnographic evidence from Andhra Pradesh and Maharashtra shows that the
non-poor even misused the program. So, information has generated corruption on the part of
some informed beneficiaries.
Conversely, in areas where poorer and illiterate participants are in greater numbers,
they are likely to experience more corruption from government officials during the
implementation because they possess less information on the benefits accruing to a
participant in the NREG. The picture from Rajasthan shows that, while the entry level capture
by the non-poor is relatively low, compared to the other two states, the corruption at the level
of implementation is higher. Here, lack of information on the part of the beneficiary reduces
the monitoring potential and effective implementation and enables corruption.
Social networking (and the access to information) increases the likelihood of
participation by the affluent but decreases the likelihood of participation by non-affluent and
the poor. This implies that the non-affluent are not able to act even if they have information.
We need to explore this result further.
The results from the three states back the rationale for the importance of a right to
information and suggests that the government should invest more in advocacy campaigns
about their programs, particularly in the poorest areas. At the same time, it is important to
carry out periodic information drives among the beneficiaries to ensure that they are aware of
the components of the scheme. However, while these measures may not stop the non-poor
from benefiting at the expense of the poor, they might introduce better monitoring of the
programs by the poor.