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Targeting public goods to the poor in a segregated economy: An empirical analysis of central mandates in rural India

  • Kochar, Anjini
  • Singh, Kesar
  • Singh, Sukhwinder
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    While local governments are increasingly being vested with control over funds for public goods, concern over the capture of decentralized funds by local elites has led decentralization to be combined with central mandates which require a certain proportion of funds to directly benefit the poor. If local capture is pervasive, however, central mandates may not be effective. Despite the popularity of this combination of decentralization and centralized control, there is little empirical evidence which separately identifies their effect on investment in public goods, and hence assesses the effectiveness of central mandates. This paper provides such evidence, using data collected by the authors for the North Indian state of Punjab, an economy where economic conditions facilitate such an analysis. We find that central mandates are effective, enhancing intra-village equality in expenditure on public goods. This finding informs the debate on the equity effects of centralized versus decentralized programs.

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    File URL: http://www.sciencedirect.com/science/article/B6V76-4W45WG2-2/2/95927c63970fd8f07e918c47a8c029ac
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    Article provided by Elsevier in its journal Journal of Public Economics.

    Volume (Year): 93 (2009)
    Issue (Month): 7-8 (August)
    Pages: 917-930

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    Handle: RePEc:eee:pubeco:v:93:y:2009:i:7-8:p:917-930
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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    1. Dilip Mookherjee & Pranab K. Bardhan, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May.
    2. Araujo, M. Caridad & Ferreira, Francisco H.G. & Lanjouw, Peter & Özler, Berk, 2008. "Local inequality and project choice: Theory and evidence from Ecuador," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1022-1046, June.
    3. Fershtman, Chaim & Murphy, Kevin M & Weiss, Yoram, 1996. "Social Status, Education, and Growth," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 108-32, February.
    4. Bardhan, Pranab & Mookherjee, Dilip, 2006. "Pro-poor targeting and accountability of local governments in West Bengal," Journal of Development Economics, Elsevier, vol. 79(2), pages 303-327, April.
    5. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
    6. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    7. Pranab Bardhan & Dilip Mookherjee, 2006. "Decentralisation and Accountability in Infrastructure Delivery in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(508), pages 101-127, 01.
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