Strategically greasing the wheels: The political economy of India's rural employment guarantee

This project investigates the role that elected politicians play in strategically “greasing the wheels” of anti-poverty programmes in developing country democracies. It studies these dynamics in the context of India's National Rural Employment Guarantee Scheme (NREGS), one of the largest-anti-poverty programmes in the world, which guarantees rural households up to 100 days of public works employment annually.

In developing countries, inefficient and capacity constrained bureaucracies often pose a significant hurdle to the effective implementation of anti-poverty programs in developing countries. In a deeply bureaucratic context, elected politicians play a key role in shaping the implementation of government programs. This project contends that ruling-party politicians play an important role in strategically “greasing the wheels” of the NREGS administration process to deliver additional funds and projects to panchayats (village councils) located in ruling-party aligned constituencies – with important distributive and welfare consequences. I argue that ruling parties exert extra pressure on local bureaucrats to deliver NREGS employment and exert more effort in procuring central funding for constituencies they control, in order to build electoral support in these areas. This is especially likely to be the case in closely contested seats, where there are the highest marginal electoral returns to political targeting.

To investigate this hypothesis, this project proceeds in three stages. First, I conduct in-depth ethnographic fieldwork in selected districts in the states of Andhra Pradesh, Rajasthan, and Uttar Pradesh in order to “trace” the process of NREGS employment provision from the “bottom-up” – from the level of households through different tiers of administrations.

Second, to test the argument statistically, I take a “big data” approach, combined with empirical methods to identify causal effects. I have geo-coded a comprehensive panel dataset from the Ministry of Rural Development, which consists of monthly program monitoring data – including information on person-days of employment– for NREGS across over 200,000 panchayats between 2009 and 2014, to state assembly constituencies and election data. To identify the causal effect of partisanship on program employment, I utilise a “regression discontinuity”design (RDD), utilising close elections as a quasi-natural experiment in which a candidate from the state-level ruling party wins or loses as-if by coin flip. Preliminary analysis shows that panchayats in assembly constituencies which elect a legislator from the ruling party, even if by only a razor thin margin, receive far more NREGS employment than panchayats in assembly constituencies which elect a legislator from the opposition party.

The final stage of the project seeks to validate and assess the extent to which this political favoritism takes the form of corruption or actual employment provision through a household survey nested within the regression discontinuity design. The household will take a stratified random sample of households selected from constituencies barely won or lost by the ruling-party in the state of Rajasthan, and will measure the impact of ruling-party political connections on employment receipt, wage theft, and program performance measured at the household level.

Overall, the findings of this project aim to call attention to the important role that elected politicians play in affecting the quality of implementation of anti-poverty programs.