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Strengthening Fragile States: Evidence from Mobile Salary Payments in Afghanistan

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  • Joshua E. Blumenstock
  • Michael Callen
  • Anastasiia Faikina
  • Stefano Fiorin
  • Tarek Ghani
  • Michael J. Callen

Abstract

Building state capacity is uniquely challenging in fragile states. We report results from a randomized evaluation of a major Afghan government initiative to increase capacity by modernizing its payroll. The reform, which required teachers to biometrically register and receive salary payments via mobile money, did little to reduce payments to non-existent “ghost” workers, but significantly reduced delays. The reform also improved educational outcomes and increased formal financial inclusion. The impacts were not immediate – highlighting the importance of long time-horizons – and were largest in urban areas. The results have implications for state-building and are potentially actionable for policymakers.

Suggested Citation

  • Joshua E. Blumenstock & Michael Callen & Anastasiia Faikina & Stefano Fiorin & Tarek Ghani & Michael J. Callen, 2023. "Strengthening Fragile States: Evidence from Mobile Salary Payments in Afghanistan," CESifo Working Paper Series 10510, CESifo.
    • Handle: RePEc:ces:ceswps:_10510
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    References listed on IDEAS

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    Cited by:

    1. Hernández Romero, Karla & Vera-Cossio, Diego A. & Hoffmann, Bridget & Pecha, Camilo, 2024. "The Promises of Digital Bank Accounts for Low-income Individuals," IDB Publications (Working Papers) 13379, Inter-American Development Bank.

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    More about this item

    Keywords

    mobile money; state-building; corruption;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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