Citizens and States: How Can Digital ID and Payments Improve State Capacity and Effectiveness?

This report considers the potential of ID, mobiles, and payments to improve the capacity of governments to deliver more effective, inclusive, and accountable programs. This trinity has been termed “JAM” in India, and the same terminology is used here for convenience, though the focus is more general than India alone. The programs can provide government-to-person (G2P) payments, or vouchers tied to the purchase of essential goods, or in-kind provision of goods and services—with or without conditionalities. They can also include fee-based services that require person-to-government (P2G) payments. These enable governments to implement a broader set of policies to reform citizen–state interactions—in other words, expanding the “policy possibility frontier.” In this report, we explore a wide range of these digitally enabled reforms and their implications across sectors, regions, and countries—and more importantly, on actual beneficiaries of public services, subsidies, and transfers.

The objective is not to cover this huge field exhaustively or to advocate for one approach over another, such as whether to provide food rations or cash, or education vouchers or public schools. It is, rather, to consider the potential for digital technology to enable three things—the precise identification of all parties to a transaction; low-cost communications; and accurate, accountable, and convenient payments—and so to improve the interactions between citizens and states.

Themes: Beneficiary Identification, Targeting, Onboarding, Digital Payment Ecosystems, Financial Inclusion