Does eGovernment Reduce Corruption? Findings from Eight Indian Projects Subhash Bhatnagar

“In the series of in-depth reports and analyses we published in the first phase of our India Poised initiative, the collapse of governance consistently came through as the most serious deterrent to a better quality of life.” [ Times of India] Corruption in India : A story of Despair & Hope Corruption has shown a declining trend: While 28 per cent of citizens participated in the survey admitted that they have dealt through middlemen, a sharp decline from 48 per cent in 2000, 30 per cent admitted of giving bribe, which was 51 per cent in [Survey by Centre for Media Studies, which covered eight major public utility services] India fares abysmally on the global corruption meter: 20% believe government does not fight corruption at all; 39% think its fight against corruption is ineffective; and 15% say that far from fighting corruption, government actually encourages it. [Transparency International] Corruption is not high as is often believed and the reasons for this can be attributed to the large-scale computerisation of services, reforms initiated by the vigilance departments and the rise in awareness among consumers.

Consequences of Administrative Corruption  Largest cost is borne by the poor  Raises cost of doing business for SMEs by 20%  Irritant to investors, impedes FDI flows  Loss of revenue to Government  Disincentive to honest employees, citizens  Citizens feel that corruption is largest hurdle in India’s progress. Increasing tolerance for corruption.  Petty corruption opportunities -> larger corruption in appointments, transfers used to collect funds for politicians

Types of Corruption in Government-to-Citizen Contact  Administrative corruption Service is denied or delayed unless bribe is paid  Collusion (both parties gain at the expense of Government) Favored allocation when mismatch between supply and demand Lower valuation by Tax collection agencies Waiving of penalties and fines Tempering government records to provide unfair advantage  Extortion Law enforcers, tax collectors make blatantly unreasonable demands to extort a bribe

Measuring eGovernment Impact on Corruption  Studies attempted to measure impact on corruption (GKSP-4 projects in 2001;MIT/IITB ethnographic study in 2004; World Bank/IIMA/DIT in 2006)  Results from different studies, same project over time have been inconclusive on impact on corruption  Impact reported is from an assessment of 8 mature projects in India through a systematic client survey in the World Bank/DIT/IIMA study.

Projects Which Were Assessed 1.Issue of land titles in Karnataka (Bhoomi): 180 Kiosks, Launched February 2001 [2-01] 2.Property registration in Karnataka (Kaveri): 230 offices [3-03] 3.Computerized Treasury (Khajane): 240 locations [11-02] 4.Property Registration in Andhra Pradesh: AP 400 offices. [11-98] 5.eSeva center in Andhra Pradesh: 250 locations in 190 towns, Used monthly by 3.5 million citizens [8-01] 6.e-Procurement in Andhra Pradesh [1-03] 7.Ahmedabad Municipal Corporation (AMC): 16 Civic Service Centers [9-02] 8.Inter State Check Posts in Gujarat: 10 locations [3-2000]

Measurement Framework Used StakeholdersKey Dimension of Impact Economic (Direct & Indirect) Governance (Corruption (Proportion paying bribes and Amount of bribes), Accountability, Transparency, Participation) Quality of Service (Decency, Fairness, Convenience, etc.) Overall satisfaction Client Economic (Direct & Indirect) Governance (Corruption, Accountability, Transparency, Participation) Performance on Key Non- economic Objectives Process Improvements Work life of employees Agency

Methodology of Assessment 1. Market Research agency used to administer survey instrument to users who had experienced delivery of computerized and manual services 2. Sample size respondents per project (30 randomly selected respondents from each of 8 service delivery points) locations chosen from delivery points on the basis of activity levels and development index of catchment. 4. Impact measured as difference between respondent ratings of computerized and manual systems.

Governance Issues Are Important BhoomiError free transaction No delay in transaction Less corruption Fewer visits KAVERILess corruption Greater transparency Error free transaction Less waiting time Khajane – DDO Simplicity of procedures Convenient time schedule Friendly attitude of officers Error free transactions Khajane - Payee No delay in transactions Convenient time schedule Good location Error-free transactions CARDLess time and effort required Less waiting time Less corruptionFair Treatment e-SevaLess time and effort required Less waiting time Convenient time schedule Fair Treatment e- Procurement Less corruption Easy accessEqual Opportunity to all No need to visit Government office AMCLess time and effort required Less corruption Greater transparency Good complaint handling Check PostNo delay in transactions Error Free Payment receipts Error-free transactions Proper queue system

Proportion Paying Bribes (As a %)

Amount of Bribes Paid

Overall Improvements Are Correlated with Corruption ProjectManualComputerDifference Bhoomi eSeva e-Procurement Checkpost AMC KAVERI CARD

Egovernment-How does it Help?  Introduces transparency in data, decisions/actions, rules, procedures, performance of Govt. agencies  Automates processes to remove discretion  Simplification of rules and reengineering processes  Makes decisions traceable- tracks actions  Introduces competition amongst delivery channels and departments  Standardized documentation of comments/ objections leads to effective supervision- through comparative indicators  Builds accountability- greater access to info through web publishing-role of civil society  Provides documentation for citizens to follow up  Centralizes data for better audit and analysis. Integration of data across applications-provides improved intelligence. Enables unbiased sampling for audit purposes

Administrative Corruption: Some Issues that Need to be Fixed  Large variation across projects, centers of projects.  Projects that automated processes have no impact. Projects that focused on corruption and reengineered processes did well.  Not enough political support to the corruption agenda  Long history of collusion between corrupt civil servants and resourced citizens creates resistance.  Lack of supervision in remote areas - problems of decentralization  Large power distance between civil servants and citizens-afraid to assert and complain  Poor mechanisms of complaint handling. Documentation is weak for investigation  Weak investigation, slow judicial system - small chance of punishment