Preamble

NCAER, under IDRC’s programme initiative, ‘Globalisation, Growth and Poverty’, is conducting research on various aspects of rural governance in an attempt to establish whether decentralization of governance and the creation of appropriate institutions are effective for achieving inclusive and pro-poor growth. Existing inefficiencies create bottlenecks in the flow of public goods and hamper people’s access to the fruits of macroeconomic growth. Hence, a more ‘bottom-up’ approach is suggested. With greater decentralization, the characteristics of public goods can be expected to match better the preferences of the target population. The research project, therefore, addresses the process of effective provision of local public goods as well as the impediments to their supply.

Objectives

The objectives of the programme of work include:

1. To create capacities within NCAER in a sustainable way to assess and propose solutions to a range of problems associated with rural development, specifically with respect to decentralization and service delivery, which include health, education and economic services.

2. To build capacities within NCAER to utilise more fully the data on socio-economic indicators that are available from a variety of sources including its own surveys in analysing important development policy issues, in the hope that this core resource would be sustained subsequently on the strength of its quality and visibility.

3. To build a network of stakeholders in academia, the policy community, civil society organisations, development community and the media so that the research would benefit from these interactions and its output would inform the discourse well beyond the research community both within the country and abroad.

4. To put in place a strategy for projecting the research output to wider audiences so that the public policy debate is based on evidence-based research.

Research

The research at NCAER involves seeking answers to the following questions:

1. Is there evidence of elite capture and corruption in decentralised forms of governance? This would help in understanding whether community participation has been interfered with by interest groups of different kinds at the village level. Such interference could prevent decentralization and inclusive growth.
   
   
2. Would decentralization increase fiscal buoyancy? Fiscal buoyancy could often be created by effective decentralization of powers of revenue generation along with responsibility for provision of public goods. Such buoyancy leads to better allocation of resources within the concerned jurisdiction as well as improved management of financial resources.
   
   
3. Does decentralization reduce coordination failure? Coordination failure, defined as the inability to provide local public goods that lead to development, is often explained as a result of inadequate decentralization. With adequate bottom-up procedures of allocation in place, these could result in better selection of projects; matching of projects with local needs could result in the elimination of coordination failures.


4. An understanding of the extent to which women and disadvantaged groups have benefited from decentralization could help in shedding light on gender-specific, gender-related and reservation policies pertaining to credit, employment, education, and health. The analysis would also show how such policies can be reformed to better target the weaker sections.
   
   
5. Is service delivery through decentralised forms of government relatively more efficient compared to service delivery under centralised frameworks? The efficiency of service delivery resulting within a bottom-up framework of planning and resource allocation would be compared with service delivery in a centralised framework. This would help in articulating the question of “magnitude” of decentralization which is in the minds of policy makers.

6. How does decentralization affect the impact of affirmative action programmes? The Government of India has taken steps to ensure affirmative action for women and other disadvantaged groups. However, much of the economic stimuli aimed at these groups have not led to improvements in outcomes to a desirable extent. The proposed research examines the impact decentralization has had and could have on such action programmes with the help of the unique ARIS/REDS panel data.

Data

A unique feature of this project is its use of an in-house panel data set that would enable the analysis of household behaviour within a relevant policy context. Since 1969, NCAER has been conducting periodic surveys of rural households in a select group of villages. The six rounds of the ARIS/REDS data sets provide a significant insight into the evolution of village economies as well as understanding the impact of policies on households. The surveys have been carried out in 1969, 1970, 1971, 1982, 1999, and 2006. Each round of the survey has three components: listing sheets, community or the village questionnaire, and the household schedule canvassed from respondent households.  Detailed information is available on local governance, participation in governance by households, quality of governance, provision of local public goods, evaluation of service delivery and on a range of issues germane to the effectiveness of local governance. These data sets have additionally been supplemented with secondary data collected from different functionaries representing different layers of the governance structure (e.g. zilla panchayats), and focuses on group discussions held in select villages. 

Deliverables

The deliverables planned include:
(i) A report on the process of governance in rural India titled “India Rural Governance Report”. This report would summarise the findings of this research (contained in the papers), highlight other experiences in India, and, present the results of case studies.
(ii) Short papers, policy briefs, editorials and web-based commentary on a descriptive level capturing the essence of findings of the research programme.
(iii) Scholarly research papers to be published in reputed international journals.
(iv) A monograph on decentralization and governance to be published later as a book.
(v)  Four policy round tables and one international conference at the end of the project.
(vi) Web resources to be made available on NCAER website on the current research programme and also other related materials that could be accessed by NCAER. We would also attempt to develop an interactive facility for exchange of research ideas/ notes on the current research programme.

Research Team

The project is being lead by Dr. Hari K. Nagarajan, Senior Fellow, NCAER. He holds a PhD in economics from the University of Oklahoma, USA.  He has taught at the Indian Institute of Management, Bangalore as well as at the University of Oklahoma. His research has primarily been in the area of rural development within which he has published papers on land markets, land reforms, mutual insurance, gender discrimination, and price formation in grain markets. He can be reached at hknagarajan@ncaer.org.

Dr. Raghbendra Jha. He is a PhD in economics from University of Columbia, USA and has taught at Williams College, Queens University, and at the Delhi School of Economics. He is currently the executive director of the ASARC of Australian National University, Canberra. Dr. Jha is the author of many books (most importantly of “The Modern Public Economics”), and journal articles in major journals. He can be reached at r.jha@anu.edu.au.

Dr. Shashanka Bhide is currently the Senior Research Counsellor and a Senior Fellow at NCAER. He is a PhD in Agricultural Economics, from Iowa State University, USA. He has also worked briefly at the Institute for Social and Economic Change, Bangalore and a visiting researcher at ASARC of the Australian National University, Canberra. His research interests include macro-economic modeling, poverty reduction, and development issues. He can be reached at sbhide@ncaer.org.

Dr. D.B.Gupta, a PhD from University of Birmingham, UK has been an active development economist for more than 40 years. He has taught at a number of universities and institutions in India and abroad and has worked extensively with the World Bank, UNICEF, WHO, Institute of Economic Growth, NIPFP, NCAER and similar organisations. His research interests encompass health, environment, housing, rural development and industry.  He has published numerous books and scholarly articles. He can be reached at dbgupta@ncaer.org

Advisory Committee

Alain de Janvry is a Professor of Agriculture and Resource Economics at University of California, Berkley. He has worked with many international development agencies, including FAO, IFAD, the World Bank, UNDP, ILO, the CGIAR, and the Inter-American Development Bank. His field of work includes poverty analysis, rural development, quantitative analysis of development policies, and impact analysis of social programs.

Andrew Foster is Professor and Chair of the Department of Economics and Professor of Community Health at Brown University. He is an empirical micro-economist with interests in the areas of population, environment, development and health. His recent work has examined economic growth in rural India, exploring such issues as growth in the non-farm economy, the effects of local democratisation, groundwater usage, forest cover, household structure, inequality, and schooling.

Klaus Deininger is a Lead Economist in the rural development group of the Development Economics Group at the World Bank.  His areas of research focus on income and asset inequality and its relationship to poverty reduction and growth, access to land, land markets, land reforms and their impact on household welfare and agricultural productivity.

Pranab Bardhan is Professor of Economics at the University of California, Berkeley.  He was Chief Editor of the Journal of Development Economics for 1985-2003. He is the BP Centennial Professor at London School of Economics for 2010 and 2011. He has done theoretical and field studies research on rural institutions in poor countries, on political economy of development policies, and on international trade.

Renana Jhabvala is the national coordinator of ITUC affiliate SEWA, which organises women workers in the informal sector in India.

S S Meenakshisundaram is a Visiting Professor of Rural Development and Decentralization at National Institute of Advance Studies, Bangalore. He was Secretary to the Government of India, Ministry of Rural Development, in 2003; Advisor, Planning Commission, in 2000 and Principal Secretary to the Chief Minister of Karnataka in 1996. His research interests include rural development, governance, poverty alleviation, Panchayati Raj institutions and natural resource management.