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Abstract Governments must pay their employees for states to function. Frequent delays and leakage of salary payments can undermine government effectiveness. These problems are severe in Afghanistan. Mobile Salary Payments (MSPs) - a system enabling employees to receive their salaries directly via mobile money -present a potential solution. At scale, MSPs can also grow the mobile money ecosystem and promote financial inclusion. We propose a randomized control evaluation of MSPs with the Ministry of Education for a sample of approximately 200,000 teachers. We also propose to evaluate an additional Call Detail Record (CDR)-based attendance monitoring system that will complement the MSPs. 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.
Trial End Date June 05, 2019 May 31, 2020
Last Published July 05, 2023 08:06 AM July 05, 2023 09:17 AM
Study Withdrawn No
Intervention Completion Date May 31, 2020
Data Collection Complete Yes
Final Sample Size: Number of Clusters (Unit of Randomization) 401 registration zones in three provinces.
Was attrition correlated with treatment status? No
Final Sample Size: Total Number of Observations Our experimental sample consists of the 34,422 MoE employees who appear at least once on official government payroll records between March 2017 and February 2020.
Final Sample Size (or Number of Clusters) by Treatment Arms Early registration, Early mobile money payments (EE): 137 zones where payroll verification was scheduled to begin in May 2018 and MSP payments were scheduled to begin in October 2018. Early registration, Delayed mobile money payments (ED): 129 zones where payroll verification was also scheduled in May 2018, but MSP payments were scheduled to begin six months after those in the EE group (April 2019); Delayed registration, Delayed mobile money payment (DD or control): 135 zones where payroll verification and MSP payments were delayed respectively by four (September 2018) and six months (April 2019) with respect to the EE group.
Data Collection Completion Date May 31, 2020
Intervention (Public) This study aims to investigate the implementation of mobile salary payments (MSPs) in the Ministry of Education (MoE). Prior to assignment, all teachers in the study will receive a mobile phone. 1) Mobile Salary Payments (MSP): Funds will go directly from the central bank to the mobile network operator (MNO). The MNO will then transfer salaries directly to the teacher. This payment method skips mediation through New Kabul Bank and the bursar, which may reduce leakage. 2) MSP + Direct Attendance Reporting: The MSP treatment stated above, plus the collection of highly granular data on teacher attendance. This teacher attendance data will be made available to the Minister of Education and the Office of the President through an online dashboard. 3) Current Payment System (Control): School principals report teacher attendance. Teachers visit the local bursar and are paid in cash. The essential steps of the current payment system are detailed below: Step 1: The school principal reports teacher attendance to the district-level bursar (Motamed) on a monthly basis. Step 2: The bursar and the district human resources officer aggregate attendance for all district schools and submit a wage bill to the National Treasury. Step 3: The Treasury authorizes a payment for the national monthly wage bill to Da Afghanistan Bank. Step 4: Da Afghanistan Bank transfers a payment for all wages to the central branch of New Kabul Bank. Step 5: New Kabul Bank transfers funds to the branch nearest to each bursar, charging a transaction fee for the transfer. Step 6: The bursar retrieves the funds from their nearest bank branch. Step 7: Teachers visit the bursar at the end of the month to retrieve their wages as cash. This study aims to investigate the implementation of mobile salary payments (MSPs) in the Ministry of Education (MoE). Prior to assignment, all teachers in the study will receive a mobile phone. 1) Mobile Salary Payments (MSP): Funds will go directly from the central bank to the mobile network operator (MNO). The MNO will then transfer salaries directly to the teacher. The biometric registration of teachers should identify ghost workers and mobile salary payments should improve the payment experience. 2) Current Payment System (Control): In cities, teachers are paid via banks and in rural areas teachers are paid via trusted agents. The essential steps of the current payment system are detailed below: Step 1: The school principal reports teacher attendance to the district-level bursar (Motamed) on a monthly basis. Step 2: The bursar and the district human resources officer aggregate attendance for all district schools and submit a wage bill to the National Treasury. Step 3: The Treasury authorizes a payment for the national monthly wage bill to Da Afghanistan Bank. Step 4: Da Afghanistan Bank transfers a payment for all wages to the central branch of New Kabul Bank. Step 5: New Kabul Bank transfers funds to the branch nearest to each bursar, charging a transaction fee for the transfer. Step 6: The bursar retrieves the funds from their nearest bank branch. Step 7: Teachers visit the bursar at the end of the month to retrieve their wages as cash.
Intervention End Date November 02, 2018 May 31, 2020
Primary Outcomes (End Points) corruption, teacher attendance, teacher absenteeism Please see the Pre-Analysis Plan
Primary Outcomes (Explanation) Corruption: mobile money logs are reviewed to determine if bursars are extracting a smaller amount of teachers’ salaries as a result of MSPs
Experimental Design (Public) Treatment is randomly assigned at the district level. Of the 396 districts in Afghanistan, approximately 340 are safe to conduct interviews (though this number varies widely from month to month). Five or 6 schools per district will be sampled. Prior to assignment, all employees in the study will be given a phone and will be enrolled in the MSP program. However, we will delay the period between receiving the phone and receiving payments (the enrollment process will take at least 3 months given the number of teachers). baseline and endline data collection exercises will comprise 2100 audits and teacher interviews per round. The baseline and endline audits and interviews in 700 schools in each treatment arm will be sampled from an MoE census of schools. The sample is representative of rural and peri-urban schools, excluding urban schools were teachers are paid via electronic bank transfer. Please see the Pre-Analysis Plan and the Paper Draft attached to this registry.
Randomization Unit 340 districts We organize the study into 401 registration zones. The pre-analysis plan and the attached academic paper provide complete details.
Planned Number of Clusters 340 districts 401 Registration zones.
Sample size (or number of clusters) by treatment arms 113 districts (700 schools) MSP treatment, 113 districts (700 schools) MSP + monitoring treatment, 113 districts (700 schools) control Our experimental sample consists of the 34,422 MoE employees who appear at least once on official government payroll records between March 2017 and February 2020, ostensibly because they worked in one of 1,530 schools in Kandahar, Nangarhar, and Parwan provinces (spanning a total of 42 districts). These schools were divided into 401 experimental reg- istration zones using information on schools’ location, number of employees, and security.
Power calculation: Minimum Detectable Effect Size for Main Outcomes We will sample 5 or 6 schools per district. We will be able to estimate standardized treatment effects of 0.19 standard deviations between any two treatment arms (166 districts,1400 schools) with 80 percent probability. Please see the pre-analysis plan.
Secondary Outcomes (End Points) Please see the Pre-Analysis Plan
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Other Primary Investigators

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Affiliation Analysis Group
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Field Before After
Affiliation UCSD Bocconi University
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Papers

Field Before After
Paper 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.
Paper Citation Blumenstock, Joshua E., Michael Callen, Anastasiia Faikina, Stefano Fiorin, and Tarek Ghani. "Strengthening Fragile States: Evidence from Mobile Salary Payments in Afghanistan." 2023
Paper URL https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4477998
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