The Power of Information: Evidence from a newspaper campaign to reduce capture

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The Power of Information Evidence from a
newspaper campaign to reduce capture

• Ritva Reinikka
• Development Research Group (DRG)
• The World Bank

• Jakob Svensson
• IIES Stockholm
• University and DRG

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The standard anti-corruption project

• Relies on legal and financial institutions ?
  judiciary, police, financial auditors ? for
  better policies of accountability
• But in many poor countries, these institutions
  are weak and among the most corrupt.
• few recent examples of successful efforts to
  combat corruption and capture in public programs.

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A complementary approach

• Takes the expected users of public services as a
  starting point
• Rather than increasing accountability from above,
  the idea is to enhance client power
• That is, to empower citizens to demand certain
  standards, monitor and challenge the abuse of
  institutions, systems, and officials with whom
  they interact in their daily lives

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An unusual policy experiment

• An information campaign in Uganda to reduce local
  capture of education funds by empowering schools
  (parents) to monitor local officials handling of
  a large school-grant program
• MOF/MOLG publish monthly transfers of capitation
  grants to districts in newspapers
• Subsequently notices on actual receipts of funds
  posted at all schools
• We exploit this policy experiment to study the
  effects of increased public access to information
  as a tool to reduce capture and corruption

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Public expenditure tracking survey (PETS)

• A public expenditure tracking survey of primary
  schools had revealed extensive capture of a
  capitation grant intended for schools
• on average schools received only 20 of their
  entitlements in 1995 (Reinikka and Svensson 2004)
  
• A repeat PETS in 2001

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Key features of relationship of accountability
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Short and long route of accountability
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Capitation Grant Program

• A national program that prescribes a set amount
  of funds to each student.
• Local (district) offices used as distribution
  channels (opportunity to capture the funds)
• PETS compares data of releases of funds (from
  central ministry) with school survey data on
  receipts

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Effects of increased public access to information
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Effects of increased public access to information

• Problem not able to observe what would happen to
  a school in both the state where it is informed
  of its entitlements and that where it is not
• Problem is compounded by the fact that the
  information campaign non-exclusive
• Intuitively, schools with access to newspapers
  are more extensively exposed to the information
  campaign
• Treatment group schools having access to at
  least one of the main newspapers

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Can the policy changes in the late 1990s explain
the improvement?

• Compare schools pre- and post-campaign
  situations, controlling for school-specific
  effects like income, quality of the school staff,
  school size

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Can the policy changes in the late 1990s explain
the improvement?
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Difference-in-differences estimation
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Newspapers and knowledge

• If newpaper access were a valid proxy of better
  access to information, schools with access to
  newspapers should be more informed about the
  program.
• Exploit data on a simple knowledge test of head
  teachers to test this prediction.

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Newspapers and knowledge
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Outcome across schools with and without access to
newspapers

• Concern newspaper access endogenous
• control for initial outcomes (including
  unobserved school specific fixed effects)
• schools do not necessarily buy their own
  newspaper
• access to newspapers determined by logistical
  factors outside the school/community's control
• School may be well informed about the program
  even if it lacks a newspaper, if parents have one
  
• Treatment group is not homogeneous
• access to newspapers varies

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Instrument for the exposure to the newspaper
campaign

• Distance to the nearest newspaper outlet.
• Valid instrument?
• must affect the schools exposure to new
  information about the grant program but have no
  direct effect on the its ability to claim funds
  from the district
• distance to the nearest newspaper outlet captures
  the cost and ease of accessing a newspaper
  correlated both with the schools and the
  communitys likelihood of being exposed

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Instrumental variable estimation

• Strong relationship between distance to the
  nearest newspaper outlet and reduction in capture
  since the newspaper campaign started in contrast
  to the earlier period
• Group effects
• Externalities in learning about the grant program
• Local officials may not be able to distinguish
  whether school is informed about its entitlement

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Conclusion

• Provision of mass information, a cheap
  intervention, allowed Uganda dramatically to
  reduce local capture of a public program aimed at
  increasing primary education
• Because poor people were less able than others to
  claim their entitlement from district officials
  before the campaign, but just as likely in 2001,
  they benefited most from it.
• Several countries have initiated similar
  capitation grant programs
• Kenya, Tanzania, Zambia, Cambodia
• The results suggest that policies to inform and
  empower the end-users should be an integral part
  of the school grant programs.