Obtaining a Driving License in India: An Experimental Approach to Studying Corruption

Date Published:

Nov 1, 2006


We conduct two experiments to understand the process of obtaining a driver’s license in India. In the first experiment, we randomly assign license candidates to one of three groups: bonus (offered a financial reward if they could obtain their license fast), lesson (offered free driving lessons upfront), and control. The control group alone illustrates bureaucratic failures: 71% of the license getters in that group avoided the mandated driving test and 62% failed a surprise driving test. The system responds to private needs—there are more license getters in the bonus group—but at a social cost: there are more license getters who cannot drive in the bonus group. The system however also appears to respond to social considerations, as there are more license getters in the lesson group. Large extra-legal payments are made by license getters: those in the control group pay 2.5 times the official fee. More of these extra-legal payments take place in the bonus group. Surprisingly, these extra-legal payments are not direct bribes to bureaucrats but instead payments to agents. In the second experiment, we perform an audit study to better understand the role of agents. The audit shows that agents can provide licenses to individuals even if they cannot drive; but the audit also shows that agents cannot as easily circumvent all other rules. We argue that our findings are most consistent with agents being the channel for corruption in this system. We also report some suggestive evidence that bureaucrats create red tape, possibly to induce more license candidates to use agents.


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