Constitutional Impediments to Decentralization in the World\u27s Largest Federal Country

Decentralization is often advocated as a means of improving local democracy and enhancing what economists call allocative efficiency. In federal countries, where power is already divided between national and state governments, decentralization involves the devolution of power from state to local governments. The world’s largest federal country, India, took an unusual step to advance decentralization: it passed the 74th Constitutional Amendment Act to confer constitutional status on municipalities. However, India’s efforts to promote the devolution of power through a national urban renewal scheme have not succeeded for three reasons. The first is that India’s decentralization process is incomplete. Political decentralization has been stymied by the language of the constitutional amendment itself; administrative decentralization has been hampered by the comparative advantage of entrenched state-level institutions; and fiscal decentralization has not occurred because financial responsibility—but not significant revenue—has been devolved. The second reason is that decentralization has been undertaken in a top-down manner, which has exacerbated Center-state relations and mitigated the goal of allocative efficiency. Third is the relative weakness of local governance structures, which has created a Catch-22 situation: as long as the local governments lack significant capacity, the states are reluctant to devolve power to them. Additional effort needs to be directed towards an effective model of cooperative federalism. With Prime Minister Narendra Modi poised to create “smart cities” and promote urban renewal, it is critical to understand why India’s prior decentralization efforts have largely failed. The lessons learned over the past decade are an important guide to the future of cities in India as well as in other federal countrie

Changing Framework of Local Governance and Community Participation in Elementary Education in India

In recent years, strengthening and better functioning of local governance have become prime concerns of educational reform agenda. Establishment of effective local governance has been part of overall changes in educational governance for several years in many countries including India. It is now widely recognized that effective local governance considerably impacts on access to education as well as the enrolment, retention and learning experiences of children in school. It is in this context, that this paper provides an overview of the changing framework of governance of elementary education and community participation in India with a special focus on its role in improving the participation of children. An attempt has also been made to examine the extent to which grassroots level functionaries and local bodies like panchayat and VEC are able to get involved in decision making processes and different approaches that have been taken by different states in regards to local governance of education. Drawing references from recent efforts made by different states, the paper has tried to establish a link between effectiveness of local governance and issues regarding access, equity and quality of school education. While discussing the changing framework of local governance, the paper critically examines the guiding principles of governance reform from two perspectives. ‘Top-down’ and ‘bottom-up’ approaches are discussed, in terms of ensuring the effectiveness of the system and empowering people for active participation in decentralized decision making process

Debt and Corporate Governance in Emerging Economies - Evidence from India

We analyze the role of debt in corporate governance with respect to a large emerging economy, India, where debt has been an important source of external finance. First, we examine the extent to which debt acts as a disciplining device in those corporations where potential for over investment is present. We undertake a comparative evaluation of group-affiliated and non-affiliated companies to see if the governance role of debt is sensitive to ownership and control structures. Second, we examine the role of institutional change in strengthening the disciplining effect or mitigating the expropriating effect of debt. In doing so, we estimate, simultaneously, the relation between Tobins Q and leverage using a large cross-section of listed manufacturing firms in India for three years, 1996, 2000, and 2003. Our analyses indicate that while in the early years of institutional change, debt did not have any disciplinary effect on either standalone or group affiliated firms, the disciplinary effect appeared in the later years as institutions become more market oriented. We also find limited evidence of debt being used as an expropriation mechanism in group firms that are more vulnerable to such expropriation. However, the disciplining effect of debt is found to persist even after controlling for such expropriation possibilities. In general, our results highlight the role of ownership structures and institutions in debt governance.Debt, ownership structure, Corporate governance, institutional change.

Investing in Sustainable Energy Futures: Multilateral Development Banks' Investments in Energy Policy

Analyzes MDB loans for electricity projects and lays out policy reforms, regulations, and institutional capacities needed to enable public and private investment in sustainable energy and ways for MDBs to address them consistently and comprehensively

Economy of Bangladesh: Identifying Pragmatic Policy Responses

Proceedings of a Seminar held in Dhaka, Bangladesh 18-19 October 201

Power, Responsibility, and Accountability: Re-Thinking the Legitimacy of Institutions for Climate Finance

Offers lessons from current mechanisms to finance climate mitigation and adaptation and considerations for legitimacy in new ones: the capacity to determine outcomes, the exercise of power as intended, and standards and systems to ensure accountability

Reforming the agricultural extension system in India: What do we know about what works where and why?

"In order to realize agricultural potential and to increase agricultural yields, India's extension system has experienced major conceptual, structural, and institutional changes since the late 1990s. This paper reviews existing reform programs and strategies currently existing in agricultural extension in India. It distinguishes strategies that have been employed to strengthen both the supply and demand sides of service provision in the area of agricultural extension, and it reviews the effects of the demand- and supply-side strategies on the access to and the quality of agricultural extension services. The ultimate objectives are (1) to gain a view on what works where and why in improving the effectiveness of agricultural extension in a decentralized environment; (2) to identify measures that strengthen and improve agricultural extension service provision; and (3) to reveal existing knowledge gaps. Although the range of extension reform approaches is wide, this paper shows that an answer to the question of what works where and why is complicated by the absence of sound and comprehensive qualitative and quantitative impact and evaluation assessment studies. Even evidence from the National Agricultural Technology Project and the Diversified Agricultural Support Project of the World Bank, the women empowerment programs of the Danish International Development Agency, the Andhra Pradesh Tribal Development Project, and the e-Choupal program of the Indian Tobacco Company is subject to methodological and identification problems. Conclusions regarding the importance (1) of implementing both decentralized, participatory, adaptive, and pluralistic demand- and supply-side extension approaches; (2) of involving the public, private, and third (civil society) sectors in extension service provision and funding; and (3) of strengthening the capacity of and the collaboration between farmers, researchers, and extension workers are necessarily tentative and require further quantification. The paper seeks to inform policymakers and providers of extension services from all sectors about the need to make performance assessments and impact evaluations inherent components of any extension program so as to increase the effectiveness of extension service reforms." from Author's AbstractDemand-driven and supply-driven agricultural extension services' extension service reforms, Agricultural extension services, Reforms, Demand driven, Supply driven, Governance,

Conflict, Resistance and Alliances in a Multi-Governance Setting: Reshaping Realities in the Andhra Pradesh Irrigation Reforms \ud

In this article, we will explore how local politics of policy, in the interaction with governance mechanisms, have produced specific polity outcomes in the irrigation sector of Andhra Pradesh. The water sector of Andhra Pradesh, which has been struggling within inefficiency, poor performance, deterioration, and lack of participation as elsewhere in India, has undergone substantial reforms aiming at Participatory Irrigation Management (PIM). Previous research has indicated how reform policy choices were contested and mediated by relevant actors and how this affected the outcome in key areas of irrigation management. This is referred to as the politics of policy. We will look at multi-level governance in a situation where different tiers represent different institutional basis, and argue that the politics of policy at multiple levels of governance can be perceived as a form of support and/or resilience by actors to new governance mechanisms/arrangement