The Impact of Changing Public Service Delivery on Inappropriate Payment Error: From Analogue Paper Coupon to Digitalized Electronic Benefit Transfer System

Abstract

In this study, we analyze the impact of innovative EBT (electronic benefit transfer) system that adopted in SNAP service delivery on SNAP payment error rate. As Clinton administration pursued public service innovation as part of New Public Management reform, the way of delivering SNAP was changed from paper coupon to EBT. To examine this impact, we have set three different types of dependent variables. The first dependent variable is combined payment error rate which is a sum of overpayment error rate and underpayment error rate. The second and third dependent variable that used in this study is overpayment error rate and underpayment error rate. In panel fixed effect model, EBT variable is significant when underpayment error rate is a dependent variable. In other words, according to empirical results from panel fixed effect model, the EBT system is significant in reducing official errors and mistakes. Contrary to this result, electronic system does not show any significant effect on overpayment error rate that closely related to the level of transparency. We did additional hierarchical regression analysis to draw determinants of overpayment error rate. Among the variables we include in hierarchical model, SR variable turned out to be the most important factor that affect overpayment error rate. According to third stage of hierarchical model, in the case of transparency, the back-up systems and social actor's attitude toward transparency are more important.