Existing evidence suggests that while political reservation for traditionally marginalised groups tilts governance outcomes in favour of those groups, there are non-discernable or negative effects on the overall quality of governance. This column demonstrates that in a divided society like that of village India, where politics is organised along identity lines, reservation could indeed improve overall governance quality.
This column is published in collaboration with VoxDev.
Numerous countries have introduced explicit quotas to ensure political representation of disadvantaged groups. In India, seats are reserved for historically disadvantaged caste groups (Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Castes (OBC)) at all levels of government − central, state, and throughout the Panchayat system1.
Reserving political office for members of traditionally marginalised groups in India has been found to tilt governance outcomes in the interests of those groups. Effects have been found on policies, public goods, provision of targeted benefits, and on measured poverty. Positive effects on the receipt of targeted benefits have been found for reserved groups in Besley, Pande and Rao (2008). Chattopadhyay and Duflo (2008) find that reserved women leaders seem to spend more on projects that are relatively highly prioritised by female village members. Bardhan, Mookherjee and Torrado (2010) find easier access to credit results from SC/STs reservation. Pande (2003) finds increased transfers to reserved groups at the state legislature.
Political reservation and overall governance quality
That reservation alters the distribution of public goods, as the evidence suggests, seems a priori reasonable, and as intended by reservation advocates. However, there are fewer reasons to expect reservation to impact the overall quality of governance: the evidence to date suggests either non-discernible effects, or negative ones. This might be because reservation replaces seasoned politicians with neophytes, or less trained leaders, and such leaders lack the skills required to shepherd through good policies. Or it may be because reservation tends to replace leaders drawn from groups that are numerous among constituents, with those from groups that are thin on the ground; the latter, it is hypothesised, having less stake in ensuring the provision of the public good that is good governance. Leader ‘quality’ has been found to decline, for both SC and female reservation by Chattopadhyay and Duflo (2004) for most observables (wealth, education, experience). Banerjee, Duflo, Imbert, Pande (2013) report that after reservation there are more contested elections because the leader is less likely to stand again. But such reservation, by inducing more inexperienced candidates to stand, and sometimes win, seems to have direct negative effects on governance outcomes.
In our paper, Anderson and Francois (2017), we study the direct impact of political reservation on overall governance quality. We demonstrate that in a divided society, like that of village India, where politics is organised along identity lines such as ethnicity, tribe or caste, there are good reasons to expect that reservation could improve overall governance quality. In such societies, the distribution of benefits to groups is of paramount interest to constituents. In such settings a type of ‘incumbency advantage’ that a group’s existing leader enjoys vis-à-vis a challenger from within the group, plays a key role. The group’s hold on power is more likely to persist if their current leader is able to re-contest power, that is, remains the supported candidate of the group, rather than being replaced by a challenger who will then contest. The larger the chances of the group winning power with the current incumbent relative to a replacement challenger, the greater the incumbent’s hold on power. As Padro-i-Miquel (2007) points out, this creates a ‘rent’ for the incumbent, allowing him/her to govern poorly, up to a point, while still receiving the support of group members. A similar logic underlies the support of leaders from all other groups, and poor overall governance is the predicted outcome regardless of which group ascends to power.
We show that political reservation in such a context is able to ameliorate these negative effects and hence improve governance. By reserving the leadership position for a representative of the group, the group no longer fears losing the election to an outsider. The reserved group does not then need to rally behind a poorly governing incumbent leader who will raise their chances of being in power, as power is assured. This allows the leadership to be freely contested and raises governance quality.
We show, however, that proportionate size matters for how reservation works since power depends on size. If a group is so small that it has almost no capacity to retain the leadership, even when retaining an incumbent, then the incumbency advantage is small. Reservation has little effect. However, as the group increases in proportion, so does the incumbency advantage of the leader, and his kleptocratic rent. These are dissipated via the contested leadership race that occurs when the group has the safety of reservation. A reserved leader drawn from a group that is larger still, so large as to be essentially guaranteed leadership even absent reservation will have no positive effect on governance. A group so large that it never fears losing the leadership position in an open contest will not have a leader enjoying kleptocratic rents in the first place. Reservation changes nothing then.
We test this non-monotonicity of the effects of reservation with respect to group size with data from rural Maharashtra. We find that reservation for groups that are almost guaranteed to provide the leader, and groups that are so small as to rarely be able to attain leadership register, no improvement in governance in Maharashtrian villages. Only reservation for groups that are able to contest but not guaranteed the leadership, raises governance quality. In the Indian context, this is more likely to happen for OBC reservation, as they often form a significant proportion of the village population, in contrast to SC and ST groups.
Key findings and implications
Our paper demonstrates that political reservation for traditionally disadvantaged castes in Indian villages can improve the quality of governance, not just with respect to that caste, but for the village as a whole. The reason it does so is due to the sclerotic nature of democracy when identity politics underlies the formation of political groupings. The collectively beneficial activities that a government could be undertaking are sacrificed in favour of the group-focussed ones in such polities.
We think this pertains to the rural Indian villages in our sample. Citizens view their elected representative firstly as an in-group member whose primary job is to provide benefits to the group and primarily assess him on that. Secondly, he is an overall village leader and, other things being equal, it is better if he can do that well too. The ensuing organisation of representatives and electors leads to a situation where a leader, doing the former task well, will be tolerated by a group even when he does the latter task poorly, leading to a type of kleptocratic rent that accrues to a personalist leader. We show that political reservation – by allowing the incumbent’s kleptocratic rent to be safely contested within the group – is a means by which this type of political dysfunction can be ameliorated. The experiment of caste-based reservation in India suggests a broader message about how government dysfunction can be overcome in identity-based electoral systems.
- Panchayat system – introduced by constitutional amendment – is a system of devolving administrative powers to local governments through Panchayati Raj Institutions.
- Anderson, S and P Francois (2017), ‘Reservations and the Politics of Fear’, BREAD Working Paper No. 522.
- Banerjee, A, E Duflo, C Imbert and R Pande (2013), ‘Entry, Exit and Candidate Selection: Evidence from India’, MIT (Massachusetts Institute of Technology) Working Paper. Available here.
- Bardhan, Pranab K, Dilip Mookherjee and Monica Parra Torrado (2010), “Impact of Political Reservations in West Bengal Local Governments on Anti-Poverty Targeting”, Journal of Globalization and Development, 1(1):1-38.
- Besley, T, R Pande and V Rao (2008), ‘The Political Economy of Gram Panchayats in South India’, in G Kadekodi, R Kanbur and V Rao (eds.), Development in Karnataka: Challenges of Governance, Equity and Empowerment, Academic Foundation, New Delhi.
- Chattopadhyay, Raghabendra and Esther Duflo (2004), “Women as Policy Makers: Evidence from a Randomized Policy Experiment in India”, Econometrica, 72(5):1409-1443. Available here.
- Padro-i-Miquel, Gerard (2007), “The Control of Politicians in Divided Societies: The Politics of Fear”, Review of Economic Studies, 74(4):1259-1274.
- Pande, Rohini (2003), “Can Mandated Political Representation Provide Disadvantaged Minorities Policy Influence? Theory and Evidence from India,” American Economic Review, 93(4):1132-1151.