Information is power. That is one important takeaway from a new research paper examining the effectiveness of enhanced and transparent communications with intended beneficiaries of a major food subsidy program in Indonesia.
The paper, titled “Tangible Information and Citizen Empowerment: Identification Cards and Food Subsidy Programs in Indonesia,” is co-authored by Rema Hanna, Jeffrey Cheah Professor of South-East Asia Studies at Harvard Kennedy School, and is published in the recent issue of the Journal of Political Economy.
Indonesia’s Raskin program, a rice subsidy program for the poor, was the subject of the study. The largest targeted transfer program in the country, with an annual budget of $1.5 billion, Raskin is designed to provide each of the 17.5 million eligible households with about 30 pounds of subsidized rice each month—about half of their rice consumption.
But because local officials often do not follow the national rules, beneficiaries rarely receive their full entitlements, the study reports. Families paid 42 percent more than the official copay price, and only about one-third of the intended subsidy made its way to the beneficiaries.
Working with the Indonesian government, the researchers used a set of field experiments in 378 randomly selected villages to test the efficiency of official cards issued to beneficiaries to inform them of their eligibility for the program and of the amount of rice they were entitled to receive. The government varied certain elements of the card program (for example, including information about the copay that the household should pay only to some beneficiaries) giving the researchers several variables to test.
The card program provided a 26 percent increase in subsidies received by eligible households, the researchers found. The copay price dropped for card recipients and the quantity of rice they received went up.
In addition, the researchers concluded that program “leakage,” whereby intended benefits are siphoned off before they reach the targeted recipients, was also greatly reduced through the use of the information cards.
“These findings strongly argue for the view that information about citizens’ rights is very scarce, at least in poor populations in developing countries, even when the rules have existed for a long time. Thus, providing information can be a powerful tool to improve service delivery,” the authors concluded.
The other researchers involved in the study are Abhijit Banerjee, Massachusetts Institute of Technology; Jordan Kyle, International Food Policy Research Institute; Benjamin A. Olken, Massachusetts Institute of Technology; and Sudarno Sumarto, Tim Nasional Percepatan Penanggulan Kemiskinan (TNP2K) and SMERU Research Institute.