This paper studies how compliance behavior varies across competing service providers in the Lifeline phone subsidy program and assesses whether enlarging the set of providers improves program outcomes. In markets where firms compete to provide government benefits or services directly to individuals, the most productive firms—in terms of service quality or operating costs—survive and serve the market. However, imperfect enforcement of program rules may weaken competitive pressures through non-compliance, allowing less productive firms to maintain market share. I exploit institutional features of the Lifeline program, state-level variation in regulatory environments and a one-time reform, to empirically document the importance of provider heterogeneity following a 2008 expansion of Lifeline. The presence of low-compliance providers in particular markets drives the largest state-level differences in wasteful or inefficient program spending. Qualitatively, these providers appear to select into state markets with looser enforcement of program rules. In counterfactual simulations, excluding low-compliance providers prevents 500,000 ineligible enrollments, while only reducing eligible enrollments by 100,000. Further restrictions come at a higher cost, reflecting the trade-off of compliance and competition.

中文翻译：

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与异构服务提供商的合规与竞争：联邦生命线计划

本文研究了生命线电话补贴计划中各竞争服务提供商之间的合规行为如何变化，并评估了扩大提供商范围是否能改善计划结果。在公司竞争直接向个人提供政府利益或服务的市场中，无论是服务质量还是运营成本，生产力最高的公司都能生存并为市场服务。但是，不严格执行程序规则可能会因不遵守规定而削弱竞争压力，从而使生产效率较低的公司保持市场份额。我利用生命线计划的机构特征，监管环境中的州级差异和一次性改革，以经验证明在2008年生命线扩展后提供商异质性的重要性。在特定市场中，低遵从性提供商的存在导致浪费或效率低下的计划支出上最大的州级差异。从质量上讲，这些提供商似乎选择了宽松的计划规则执行权进入州市场。在反事实模拟中，将低遵从性提供程序排除在外可防止500,000个不合格的注册，而仅将合格注册减少100,000个。进一步的限制需要付出更高的代价，这反映了在合规性和竞争性之间的权衡。同时仅将合格入学人数减少100,000。进一步的限制需要付出更高的代价，这反映了在合规性和竞争性之间的权衡。同时仅将合格入学人数减少100,000。进一步的限制需要付出更高的代价，这反映了在合规性和竞争性之间的权衡。