OBTAINING A DRIVER’S LICENSE IN INDIA - AN EXPERIMENTAL APPROACH TO STUDYING CORRUPTION

Sep 18, 2026

Uploaded by Gloria

This paper studies how driver’s licenses are allocated in Delhi, India, using randomized assignment of applicants to three groups: bonus, lesson, and comparison. Both bonus and lesson increase the likelihood of obtaining licenses, but bonus participants are more likely to make extralegal payments and to receive licenses without being able to drive. Extralegal payments flow through private agents who can circumvent driving-test procedures, showing corruption distorts allocation rather than only redistributing resources.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages38

Reading Time1 h 36 min

AccessFree to download

I. INTRODUCTION

Research context and corruption debate

Study design and randomized treatments

Evidence from baseline experiences

Distortions and willingness to pay

OBTAINING A DRIVER’S LICENSE IN INDIA: AN EXPERIMENTAL APPROACH TO STUDYING CORRUPTION* MARIANNE BERTRAND SIMEON DJANKOV REMA HANNA SENDHIL MULLAINATHAN We study the allocation of driver’s licenses in India by randomly assigning applicants to one of three groups: bonus (offered a bonus for obtaining a license quickly), lesson (offered free driving lessons), or comparison. Both the bonus and lesson groups are more likely to obtain licenses. However, bonus group members are more likely to make extralegal payments and to obtain licenses without knowing how to drive. All extralegal payments happen through private intermediaries (“agents”) . An audit study of agents reveals that they can circumvent procedures such as the driving test. Overall, our results support the view that corruption does not merely reﬂect transfers from citizens to bureaucrats but distorts allocation. I. INTRODUCTION Public service provision in many developing countries is rife with corruption. A basic question about such corruption is whether it merely represents redistribution between citizens and bureaucrats or results in important distortions in how bureaucrats allocate services. This question underlies the debate on the efﬁciency implications of corruption, with some arguing that corruption merely “greases the wheels” of the bureaucracy and others arguing that it harms society.1 In this paper, we use detailed survey data and experimental evidence to study this question in the context of one particular bureaucratic process: the provision of driver’s licenses in Delhi, India. * This project was conducted and funded by the International Finance Corporation. We thank Anup Kumar Roy for outstanding research assistance. Weare grateful to Lawrence Katz (the editor), three anonymous referees, Abhijit Banerjee, Gary Becker, Ryan Bubb, Anne Case, Angus Deaton, Luis Garicano, Ed Glaeser, Ben Olken, Sam Peltzman, Andrei Shleifer, and Jakob Svensson and to seminar participants at Harvard, MIT, Princeton, the University of California at Berkeley, the University of Chicago GSB, LSE, Yale University, NYU, Ohio State University, the University of Florida, the University of Toronto, the World Bank, and the ASSA 2006 meeting for helpful comments. 1. For the “grease-the-wheels” view, see Leff (1964), Huntington (1968), and Lui (1985) . For example, Huntington (1968) remarked that “[I]n terms of economic growth, the only thing worse than a society with a rigid, overcentralized, dishonest bureaucracy is one with a rigid, overcentralized, and honest bureaucracy.” For arguments on how corruption can harm society, see Myrdal (1968), Rose-Ackerman (1978), Klitgaard (1991), Shleifer and Vishny (1992, 1993), and Djankov et al.(2002) . 2007 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology. The Quarterly Journal of Economics, November 2007 Downloaded from [https://academic.oup.com/qje/article-abstract/122/4/1639/1850513 by University of Chicago Library user on](https://academic.oup.com/qje/article-abstract/122/4/1639/1850513 by University of Chicago Library user on) 14 November 2018 1640 QUARTERLY JOURNAL OF ECONOMICS Speciﬁcally, between October 2004 and April 2005, the International Finance Corporation (IFC) followed 822 driver’s license candidates, collecting data on whether they obtained licenses, as well as detailed micro data on the speciﬁc procedures, time, and expenditures involved.2 At the end of the process, the IFC administered an independent surprise driving test (simulating the test that is supposed to be given by the bureaucrats) to determine whether individuals who were granted a license could drive. To understand whether and how corruption affects allocation, license candidates were randomly assigned to one of three groups. The “bonus group” were offered a large ﬁnancial reward if they were able to obtain a license in 32 days (two days longer than the statutory minimum time of 30 days) . The “l

FAQs

How are applicants assigned in the study of driver’s license allocation?

Applicants are randomly assigned to a bonus group, a lesson group, or a comparison group tracked through the process.

What effects do the bonus and lesson treatments have on obtaining licenses?

Both treatments increase the probability of obtaining licenses, but the bonus group shows higher extralegal payments and more licenses granted to drivers who cannot actually drive.

What role do private intermediaries (“agents”) play in the corruption mechanisms?

Extralegal payments occur through agents, and an audit study finds agents can circumvent procedures such as the driving test.

Sep 18, 2026

Uploaded by Gloria