The International Growth Centre recently produced a synthesis paper (Afridi 2017) bringing together insights from its research on governance and public service delivery in India, over the past seven years. At a workshop organised by the IGC in collaboration with Ideas for India and Indian Statistical Institute, Amarjeet Sinha (Ministry of Rural Development), Rajesh Mahapatra (Hindustan Times), and Sandip Sukhtankar (University of Virginia) discussed the findings on key governance challenges and what can be done to address them.
Full video available here.
The quality of governance and public service delivery can affect economic growth through its impact on human capital, poverty and inequality, and corruption. It is widely agreed that there is a governance deficit in India and while there has been progress in the delivery of public services, it is unsatisfactory when compared with other countries at similar levels of development. There are large disparities between the poor and non-poor in the country and it is the poor that suffer much more due to weak public service delivery than those who can access these services from the market.
Based on a review of the recent research on governance and public service delivery in India, the issues may be broadly categorised into the following challenges:
The main incentive of politicians is to win elections. This results in clientelistic behaviour and capture of public goods and services by the local elite (Bardhan and Mookherjee 2012). Golden and Min (2012) find that electricity theft in Uttar Pradesh was significantly greater in the year when elections to the State Assembly were held, indicating that politicians dole out favours to local elites in lieu of votes. This climate of political clientelism and elite capture is exacerbated by ‘identity politics’, with citizens preferring to vote for politicians belonging to the same community, caste, or religion as them. Besides, the share of elected politicians with criminal backgrounds has been rising, particularly in closely-contested elections as these politicians may be more effective in garnering votes through intimidation (Aidt et al. 2011), and this can negatively impact economic growth (Prakash et al. 2015).
What policy measures can help align the incentives of public officials with those of citizens?
While decentralisation (devolving administrative powers to local governments through Panchayati Raj) seems to have furthered clientelism and elite capture (Bardhan and Mookherjee 2000), Sekhri (2011) shows that natural resources may be better conserved by local rather than top-down governments as they are better able to internalise intertemporal externalities.
Affirmative action does seem to have benefits in terms of improved access to public services for marginalised groups (Chattopadhyay and Duflo 2004), but there are concerns that not enough is done for building capacity of elected leaders in reserved constituencies (Afridi et al. 2016). In this context, Mr Sinha remarked that the chair of the ‘sarpanch pati’ (male partner) by the side of the elected female leader is vanishing in many parts of rural India.
When politicians foresee electoral returns to providing assistance to citizens, they are more likely to be responsive to their concerns. Based on an experiment in Delhi slums, Gaikwad and Nellis (2016) find that when migrants signal to politicians through SMS that they are registered voters, the migrant-native gap in terms of responsiveness of the politician gets wiped out.
Finally, there is evidence that suggests that performance-related pay can increase overall effort by public officials and hence, improve public service delivery (Berg et al. 2016). However, measuring performance is tricky and not enough work has been done on this.
Prof. Sukhtankar said that we need to consider structural constraints that some of these reforms might face. There are issues related to electoral finance that may underlie some of the corruption that takes place, and these ought to be analysed in greater depth. Besides, further research is required in the area of bureaucratic reforms; these may be constrained by limited ability to hire and fire public officials or to have incentive-based compensation schemes for them.
There are two sets of missing information: first, the poor are not fully aware of the returns to services such as health and education; and second, they do not have the necessary information to be able to evaluate the quality of public services and the performance of public officials. Berry and Coffman (2012) find that poor households underestimate the probability of finding work, for every level of education, leading to underinvestment in human capital and undervaluation of related public services. Afridi, Barooah and Somanathan (2017) highlight the significant gaps between parental perceptions and actual learning outcomes of students in rural Rajasthan.
Providing information on the relative quality of public services can have a significant impact on the quality of public services, if the electorate can exercise choice. Similarly, to keep a check on costs and quality in the private sector, Mr Sinha emphasised the importance of a functioning, countervailing presence of public systems, particularly in health and education.
Community mobilisation is another effective, low-cost method of putting pressure on public officials to deliver. According to Mr Sinha, it is important to deepen our understanding of the participation of women from poor, lower-caste, vulnerable households in Self-Help Groups (SHGs): "Ultimately, a lot of the change that we are aspiring for is going to come through collectives of poor households coming together for their entitlements and rights."
Mr Mahapatra contended that the success of all of these measures depends on how well accountability structures are built, and media has an important role to play here. However, the issues taken up by the media are becoming very scattered. For instance, a newspaper may have several reports for health and education spread across the country. However, they work in silos; what is missing is a platform where they can come together and contribute to an informed debate on what is ailing our public systems. As the discussion around health, education, and basic services is gaining political momentum, print and digital media are also beginning to pick them up. What is also very important for informed debates on issues of significance is linkage between media and academia: "Academics need to communicate in a language that people outside of their community can understand", said Mr Mahapatra.
Prof. Sukhtankar said that in this age of social media, one may have expected enhanced information provision to improve the ability of citizens to hold politicians accountable. Instead, we have Whatsapp rumours and fake news. In such an environment, how do we ensure that citizens have the right information? Mr Mahapatra agreed that while social media presents a brilliant opportunity, there is reason to be concerned about the way it currently gets used. This is because the requisite laws haven’t come up yet. We cannot counter the misuse in the realm of technology but we may do so in the realm of legal advocacy.
Even if we assume that the State has the right incentives and intentions to deliver public services efficiently, does it have the capacity to do so? Public services and programmes typically wind their way to the final beneficiary through a complex web of government rules and regulations that are managed by myriad intermediaries at various stages of service provision. There are concerns around weak monitoring, leakages, and hobbled legal institutions (Afridi and Iversen 2014, Sukhtankar and Vaishnav 2015).
Research shows that poor enforcement can have sizeable efficiency costs. For instance, public resource constraints prevent perfect enforcement of tax liabilities: lower effective tax rates may help small, less productive, family-run firms and divert resources away from larger, more productive firms, thereby reducing aggregate output and productivity (Patnaik 2014).
Technology can be leveraged to monitor and improve accountability in service delivery. Recent advances in using biometric identification and electronic transfers of benefits to stakeholder’s accounts may have led to significant reduction in programme leakages, and provided a direct interface between the State and the potential beneficiary (Muralidharan et al. 2016; Barnwal 2015). However, there are administrative challenges associated with the use of ICT (Information and Communications Technology) services as well as issues of last-mile access that need to be tackled. Further work is also required on measures to raise the efforts of frontline providers of health and education as their services cannot entirely be mechanised, and technological innovations have limited impact on improving accountability in this case.
Informal monitoring and enforcement mechanisms by using social proximity or closeness of identity are found to be effective and can help alleviate some of the concerns around high costs of monitoring and enforcement. Nagavarapu and Sekhri (2013) find that Scheduled Castes have a higher take-up of government-subsidised food when facing a delivery agent of the same caste.
Finally, it is important to note that all of these public services are essentially implemented at the state level. Hence, cohesion and consensus among states should be promoted and laggard states need to be incentivised to undertake reforms. The video and blog post for the IGC Synthesis Paper on 'Health policy & economic growth in India' are available here. The video and blog post for the IGC Synthesis Paper on 'Financial Inclusion' are available here.