Seminar Vol. 143
Title: Countering Clientelism: The Impact of Performance-based Incentives on Elected Local Politicians in India
Speaker: Slesh Anand Shrestha, National University of Singapore
Time: April 19th, 2019 13:30–15:00
Venue: Conference Room 106B, Zhonghui Building (IESR, JNU College of Economics)
About the speaker:
Slesh Anand Shrestha is an Assistant Professor at the Department of Economics, National University of Singapore. His areas of research include migration, labor markets, infrastructure, and effective delivery of public goods and development services. He is currently conducting a labor survey of return migrants in Nepal, designing interventions that improve labor outcomes among migrants in Singapore, examining the effects of inter-ethnic competition for resources and self-segregation in Malaysia, and running field experiments on incentivizing aid workers and political leaders in Pakistan and India. He has worked as a consultant in the World Bank and International Monetary Fund, including contributions to the World Development Report on Jobs and South Asia Report on Inequality. A native of Nepal, he received his Bachelors of Arts degree from Ohio Wesleyan University, and his Ph.D. from University of Michigan.
Abstract:
A key function of government is to ensure equitable access to basic public goods and services. Even with fair and well-functioning democratic institutions, elected local governments in many developing countries have failed to deliver both equity in access to key services and improvement in the quality of services. Some of these failures can be attributed to political market imperfections that give rise to clientelist politics, and underlie the inequality in the allocation of public resources. To investigate whether a performance-based incentive can be used to reduce such politically-driven inequality and improve public policy outcomes, we randomly assigned recently elected politicians (Gram Panchayat or GP presidents) in India to one of two incentive schemes (or a control group). We find that both financial as well as nonfinancial incentives improved access to public investments and private transfers in GPs of incentivized presidents. More strikingly, nonfinancial incentive also led to a more equitable within-GP allocation of public resources, with strong distributional effects that suggest a reduction in inequality based on the voters’ physical and social proximity to the GP president. On the other hand, financial incentive did not affect such within-GP inequalities. Given this, the results suggest that nonfinancial incentive — that rewards high performing presidents by disseminating this information to all the voters in their GP — was effective in countering the inequity consequences of political clientelism; and, it did so without crowding out the underlying political motivation of GP presidents.
