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Making the Politician and the Bureaucrat Deliver - Employment Guarantee in India

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  • Ashima Goyal

    (Indira Gandhi Institute of Development Research)

Abstract

The paper examines the division of tasks required between politicians and bureaucrats to run an effective rural employment guarantee scheme (EGS) in India, in the context of Indian history and habits. There are still weaknesses in the incentive structure of the new nationwide EGS. First, there is no guarantee that high quality durable assets will be produced. Second, the role of the bureaucrat in the EGS is not clearly defined. A number of analytical results are obtained. A major one is giving the bureaucrat a long-term task (durable assets) as his objective will ensure the completion of both tasks, since effort must be allocated to the short-term task (employment) in order to achieve the long-term task. More power to the local populace and politicians will ensure that local needs, including employment are met. The results, together with an examination of the interactions between politicians and bureaucrats, village self-government, and the water economy in India, imply that an EGS with good incentive properties has the potential to reverse corruption of the executive, and vitalize village self-government. Lower level politicians are more accountable to the public. The tradition of voluntary labour associated with cooperative village management of the water economy, can make local resources available to extend the cyclical EGS. Higher own resources at stake will improve the efficiency of resource utilization and the quality of work done.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Labor Economics Working Papers with number 22364.

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Date of creation: Jan 2005
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Handle: RePEc:eab:laborw:22364

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Keywords: Politician; bureaucrat; incentives; employment guarantee;

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  1. Tirole, Jean, 1994. "The Internal Organization of Government," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 1-29, January.
  2. Alesina, Alberto F & Tabellini, Guido, 2004. "Bureaucrats or Politicians?," CEPR Discussion Papers 4252, C.E.P.R. Discussion Papers.
  3. Hayami, Y & Platteau, J-P, 1997. "Resource Endowments and Agricultural Development : Africa vs. Asia," Papers 192, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  4. Barrett, Christopher B. & Holden, Stein & Clay, Daniel C., 2002. "Can Food-for-Work Programmes Reduce Vulnerability?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Persson, Torsten & Tabellini, Guido, 1997. "Political Economics and Macroeconomic Policy," CEPR Discussion Papers 1759, C.E.P.R. Discussion Papers.
  6. Hart, Oliver & Shleifer, Andrei & Vishny, Robert W, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(4), pages 1127-61, November.
  7. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change
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  8. Goyal, Ashima, 2003. "Budgetary processes: a political economy perspective," MPRA Paper 27786, University Library of Munich, Germany.
  9. Cooper, Russell & John, Andrew, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 103(3), pages 441-63, August.
  10. North, D-C, 1997. "The Process of Economic Change," Research Paper 128, World Institute for Development Economics Research.
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