Information Bypass : Using Low-Cost Technological Innovations to Curb

Distribution networks entrusted to run welfare programs can have enduring leakages due to expensive monitoring of agents at several echelons. This paper features a technological innovation harnessing low-cost computing that can help to curb leakages and reduce inefficiencies in such complex welfare distribution networks. A phone-based ‘Interactive Voice Response System’ that requires the last-mile distribution agents to report the number of beneficiaries at a very high frequency concurrently with business-as-usual beneficiary information reporting by the middle-tier delivery agents serves as a mechanism for increasing accountability. Using the roll-out of this system, we demonstrate that this innovation reduced leakage in school lunch provision in Bihar, India. While independently collected data highlights improvements in delivery, official statistics indicate a decline in the school lunches provision. We use within Bihar cellular towers location to bolster our identification in an instrumental variable framework