Declining Clientelism of Welfare Benefits? Targeting and Political Competition based Evidence from an Indian State

It has been argued that since 2014, under the BJP-led central government, welfare benefits in India have become better targeted and less prone to clientelistic control by state and local governments. Arguably this has helped to increase the vote share of the BJP vis-a-vis regional parties. We test these hypotheses using longitudinal data from 3500 rural households in the state of West Bengal. We fail to find evidence that the new “central” programs introduced after 2014 were better targeted than traditional “state” programs, or that the targeting of state programs improved after 2014. Households receiving the new “central” benefits introduced since 2014 were more likely to switch their political support to the BJP. However, changes in the scale, composition or targeting of these programs, in clientelistic effectiveness of traditional state programs or in household incomes, fail to account for the large observed increase in the voters’ support for the BJP. Non-Hindus, especially recent immigrant nonHindus, were much less likely to switch support to the BJP, even after controlling for benefits received and changes in household incomes. Our results suggest that ideology and identity politics were more important factors explaining the rising popularity of the BJP

Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries

We conduct a field experiment in India comparing two ways of delegating selection of microcredit clients among smallholder farmers to local intermediaries: a private trader (TRAIL), versus a local-government appointee (GRAIL). Selected beneficiaries in both schemes were equally likely to take up and repay loans, and experienced similar increases in borrowing and farm output. However farm profits increased and unit costs of production decreased significantly only in TRAIL. While there is some evidence of superior selection by ability and landholding in TRAIL, the results are mainly driven by greater reduction of unit production costs for TRAIL treated farmers than GRAIL treated farmers of similar ability or landholding. We develop and test a model where the TRAIL agents’ role as middlemen in the agricultural supply chain enabled and motivated them to offer treated farmers business advice, which helped them lower unit costs

Decentralized Targeting of Agricultural Credit Programs: Private versus Political Intermediaries

We compare two different methods of appointing a local commission agent as an intermediary for a credit program. In the Trader-Agent Intermediated Lending Scheme (TRAIL), the agent was a randomly selected established private trader, while in the Gram Panchayat-Agent Intermediated-Lending Scheme (GRAIL), he was randomly chosen from nominations by the elected village council. More TRAIL loans were taken up, but repayment rates were similar, and TRAIL loans had larger average impacts on borrowers’ farm incomes. The majority of this difference in impacts is due to differences in treatment effects conditional on farmer productivity, rather than differences in borrower selection patterns. The findings can be explained by a model where TRAIL agents increased their middleman profits by helping more able treated borrowers reduce their unit costs and increase output. In contrast, for political reasons GRAIL agents monitored the less able treated borrowers and reduced their default risk

Sex Ratio at Birth in India, Its Relation to Birth Order, Sex of Previous Children and Use of Indigenous Medicine

Objective: Sex-ratio at birth in families with previous girls is worse than those with a boy. Our aim was to prospectively study in a large maternal and child unit sex-ratio against previous birth sex and use of traditional medicines for sex selection. Main Outcome Measures: Sex-ratio among mothers in families with a previous girl and in those with a previous boy, prevalence of indigenous medicine use and sex-ratio in those using medicines for sex selection. Results: Overall there were 806 girls to 1000 boys. The sex-ratio was 720:1000 if there was one previous girl and 178:1000 if there were two previous girls. In second children of families with a previous boy 1017 girls were born per 1000 boys. Sexratio in those with one previous girl, who were taking traditional medicines for sex selection, was 928:1000. Conclusion: Evidence from the second children clearly shows the sex-ratio is being manipulated by human interventions. More mothers with previous girls tend to use traditional medicines for sex selection, in their subsequent pregnancies. Those taking such medication do not seem to be helped according to expectations. They seem to rely on this method and so are less likely use more definitive methods like sex selective abortions. This is the first such prospective investigation of sex ratio in second children looked at against the sex of previous children. More studies are needed to confirm the findings

De jure determinants of new firm formation: how the pillars of constitutions influence entrepreneurship

This paper provides empirical evidence supporting the view that constitutions are the primary and fundamental institutional determinant of entrepreneurship. It shows that some of the provisions contained in national constitutions are positively and significantly associated with a standard measure of entrepreneurial dynamics, namely the rate of new business density. Using for 115 countries a novel dataset containing the characteristics of the constitutions enacted in the world, applying an IV-GMM treatment to deal with the endogeneity of constitutional rules, and controlling for de facto variables, the paper finds that provisions about the right to conduct/establish a business, the right to strike, consumer protection, anti-corruption, and compulsory education promote higher rates of new firm formation. Contrasting results are instead obtained for provisions concerning protection of intellectual property rights

Gender Based Within-Household Inequality in Childhood Immunization in India: Changes over Time and across Regions

Background and Objectives: Despite India’s substantial economic growth in the past two decades, girls in India are discriminated against in access to preventive healthcare including immunizations. Surprisingly, no study has assessed the contribution of gender based within-household discrimination to the overall inequality in immunization status of Indian children. This study therefore has two objectives: to estimate the gender based within-household inequality (GWHI) in immunization status of Indian children and to examine the inter-regional and inter-temporal variations in the GWHI. Data and Methods: The present study used households with a pair of male-female siblings (aged 1–5 years) from two rounds of National Family Health Survey (NFHS, 1992–93 and 2005–06). The overall inequality in the immunization status (after controlling for age and birth order) of children was decomposed into within-households and between-households components using Mean log deviation to obtain the GWHI component. The analysis was conducted at the all-India level as well as for six specified geographical regions and at two time points (1992–93 and 2005–06). Household fixed-effects models for immunization status of children were also estimated. Results and Conclusions: Findings from household fixed effects analysis indicated that the immunization scores of girls were significantly lower than that of boys. The inequality decompositions revealed that, at the all-India level, the absolute level of GWHI in immunization status decreased from 0.035 in 1992–93 to 0.023 in 2005–06. However, as a percentage o

The Labour Market in India

This chapter outlines the salient features of the labour market in India. Firstly, there has been a large shift in the workforce from agriculture to industry and services between 1951 and 2012 with more recent data showing these trends continuing. A consequence of these changes is that productivity in agriculture, relative to overall productivity, has fallen sharply while that of services has risen dramatically. A second noteworthy feature of the Indian labour market is the low participation rate, defined as the proportion of the population aged 15–65 years (the “working age” population) that is either working or seeking employment. In particular, the low (by international standards) female participation rate, which was within the 34–37% range in the 15-year period up to 2005, has declined further and stabilised at a rate of 27%. A third feature of the Indian labour market is the preponderance of informal workers and the domination of the labour market by the unorganised sector comprising enterprises employing less than 10 workers. A fourth feature of the Indian labour market is the existence of draconian labour market regulations which constrain the freedom of employers. The last feature of the Indian labour market is government provision of jobs to the rural poor under the auspices of the National Rural Employment Guarantee Act (NREGA)