Policy reforms, institutions and the poor in rural India

Contemporary South Asia

Volumn 8, Issue 1, 1999, Pages 7-28

  Gaiha, Raghav ^b   Kulkarni, Vani ^a  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

^b NONE

Author keywords

[No Author keywords available]

Indexed keywords

FINANCIAL CRISIS; POLICY REFORM; POVERTY ALLEVIATION; RURAL AREA; STRUCTURAL ADJUSTMENT;

INDIA;

EID: 0032815035     PISSN: 09584935     EISSN: None     Source Type: Journal    
DOI: 10.1080/09584939908719853     Document Type: Article

References (92)

1. Some of the work was done by the first author during his stay at the Department of Economics, Stanford University. The encouragement and advice of Anne Krueger are gratefully acknowledged. Subsequently, some additional work was done at the Centre for International Studies, MIT, and CASI, University of Pennyslvania. The analysis benefited from the valuable suggestions of Myron Weiner and Francine Frankel. Discussions with T.N. Srinivasan, Bina Agarwal, M. Lipton, C.J. Bliss, Pranab Bardhan, J. Drèze, K.L. Krishna, Atul Kohli, P. Seabright, A. Varshney, V.N. Pandit, Gobind Nankani, Hans Binswanger and Rohini Nayyar have helped refine the arguments. We are particularly indebted to P.D. Kaushik for generously sharing with us the preliminary findings of an on-going collaborative study, and to M.A. Gandhi for his help with the analysis of household data. None of the above is of course responsible for the deficiencies that remain. An earlier version was presented as an invited contribution to the Panel on Democratisation and Economic Reforms: Lessons from Asian Experience, International Convention of Asia Scholars, Noordwijkerhout, The Netherlands.
2. Sometimes two major components of policy reforms are distinguished. One is stabilisation, aimed at controlling the fiscal and balance of payments deficits and maintaining a low rate of inflation. This is sought to be achieved through an appropriate exchange rate, interest rate, fiscal and monetary policies. Another is structural adjustment, aimed at opening up of the economy to international trade and investment through a movement in policies towards a neutral trade regime and domestic deregulation. A difficulty, however, is that some policy measures (eg devaluation) are common to both components. Hence a rigid distinction is eschewed. Much of the focus of the present analysis is on the initial phase of policy reforms.
3. (a) For elaboration and review, see V. Joshi and I.M.D. Little, India's Economic Reforms 1991-2001 (Delhi: Oxford University Press, 1996), and T.N. Srinivasan, 'Indian economic reforms: background, rationale and next steps' (New Haven; Economic Growth Centre, Yale University, 1995). For a different perspective, see D. Nayyar, Economic Liberalisation in India: Analytics, Experience and Lessons (Calcutta, Orient Longman, 1996).
4. (a) For elaboration and review, see V. Joshi and I.M.D. Little, India's Economic Reforms 1991-2001 (Delhi: Oxford University Press, 1996), and T.N. Srinivasan, 'Indian economic reforms: background, rationale and next steps' (New Haven; Economic Growth Centre, Yale University, 1995). For a different perspective, see D. Nayyar, Economic Liberalisation in India: Analytics, Experience and Lessons (Calcutta, Orient Longman, 1996).
5. (a) For elaboration and review, see V. Joshi and I.M.D. Little, India's Economic Reforms 1991-2001 (Delhi: Oxford University Press, 1996), and T.N. Srinivasan, 'Indian economic reforms: background, rationale and next steps' (New Haven; Economic Growth Centre, Yale University, 1995). For a different perspective, see D. Nayyar, Economic Liberalisation in India: Analytics, Experience and Lessons (Calcutta, Orient Longman, 1996).
6. (b) P. Pattanaik, 'Economic policy and its political management in the current conjuncture', Panel 4: Economic reforms and regional politics, in a conference organised by CASI, University of Pennyslvania, and UPIASI, New Delhi, 1997, however, over-emphasises the role of import liberalisation in the macro-economic crisis, as the evidence cited is patchy and inconclusive. For a critique, see R. Gaiha, 'Economic policy and its political management in the current conjuncture - a comment', typescript, 1997.
7. (b) P. Pattanaik, 'Economic policy and its political management in the current conjuncture', Panel 4: Economic reforms and regional politics, in a conference organised by CASI, University of Pennyslvania, and UPIASI, New Delhi, 1997, however, over-emphasises the role of import liberalisation in the macro-economic crisis, as the evidence cited is patchy and inconclusive. For a critique, see R. Gaiha, 'Economic policy and its political management in the current conjuncture - a comment', typescript, 1997.
8. Other major subsidies (eg on electricity and irrigation), however, remained intact, despite their heavier fiscal burden.
9. Allocations for the Jawahar Rozgar Yojana (JRY) and Integrated Rural Development programme (IRDP), for example, were raised by about 49% and 56%, respectively, between 1992-1993 and 1993-1994 (in real terms).
10. The PDS supplies specified quantities of rice, wheat, coarse cereals, edible oils and sugar at prices below ruling retail market prices to holders of ration cards through designated shops. Although initially the PDS covered (except in Kerala) only urban areas, at present rural areas are also covered. Procurement and distribution are organised by the Food Corporation of India (FCI) and corresponding state-level agencies.
11. Following J. Behrman and A. Deolalikar, 'The poor and the social sectors during a period of macro-economic adjustment: empirical evidence for Jamaica', The World Bank Economic Review, Vol. 5, No. 2, 1991, a shift in the trend in a macro or sectoral indicator is attributed to policy reforms. For details, see R. Gaiha, 'Structural adjustment, markets and the rural poor in India - a comparative analysis of Andhra Pradesh, Maharashtra and Karnataka' (Stanford: Department of Economics, Stanford University, draft, 1996).
12. Following J. Behrman and A. Deolalikar, 'The poor and the social sectors during a period of macro-economic adjustment: empirical evidence for Jamaica', The World Bank Economic Review, Vol. 5, No. 2, 1991, a shift in the trend in a macro or sectoral indicator is attributed to policy reforms. For details, see R. Gaiha, 'Structural adjustment, markets and the rural poor in India - a comparative analysis of Andhra Pradesh, Maharashtra and Karnataka' (Stanford: Department of Economics, Stanford University, draft, 1996).
13. α) - are widely used to capture alternative dimensions of poverty corresponding to its incidence, depth and severity, respectively. H is given by the proportion of the population whose per capita consumption or income is below a given cut-off point. PG is the average distance below the poverty cut-off point among the poor. SPG is based on the individual poverty gaps raised to a power of 2. For more detailed expositions, see M. Ravallion, Poverty Comparisons (Washington DC: World Bank, mimeo, 1992), and R. Gaiha, Design of Poverty Alleviation Strategy in Rural Areas (Rome: FAO, 1993).
14. α) - are widely used to capture alternative dimensions of poverty corresponding to its incidence, depth and severity, respectively. H is given by the proportion of the population whose per capita consumption or income is below a given cut-off point. PG is the average distance below the poverty cut-off point among the poor. SPG is based on the individual poverty gaps raised to a power of 2. For more detailed expositions, see M. Ravallion, Poverty Comparisons (Washington DC: World Bank, mimeo, 1992), and R. Gaiha, Design of Poverty Alleviation Strategy in Rural Areas (Rome: FAO, 1993).
15. (b) Note that the all-India estimates on which these changes are based differ from the population-weighted estimates derived from those for individual states in Table 1. The latter are confined to the estimates for 14 major states, excluding some small ones. For details, see G. Datt and M. Ravallion, 'Economic reform and its impact on the poor - a case study for India', Review of Development Economics, Vol. 1, No. 2, 1997.
16. For details, see S. Tendulkar, 'Indian economic policy reforms and poverty: an assessment', in I. Ahluwalia and I.M.D. Little (eds) India's Economic Reforms and Development (New Delhi: Oxford University Press, 1998).
17. A referee has drawn attention to the opposite effects of a price rise on food producers and buyers. While producers gain, consumers lose. As a result, the net effect of a price rise on poverty may be small. But since a large majority of rural poor comprise small farmers and labourers - both net buyers of food - the net effect is likely to be substantial. For an empirical illustration, see R. Gaiha, 'Does agricultural growth matter in poverty alleviation?', Development and Change, Vol. 26, 1995.
18. See, for example, S.P. Gupta, 'Economic reform and its impact on poor', Economic and Political Weekly, 3 June 1995, for a confirmation of the adverse effects of policy reforms on the rural poor.
19. C.H.H. Rao, 'Agricultural growth, sustainability and poverty alleviation - recent trends and major issues of reform,' Economic and Political Weekly, 18 July 1998, notes that 'there was a sudden rise of 30% in the prices of nitrogenous fertilisers and a doubling of the prices of phosphatic and potassic fertilisers following their decontrol in the early 1990s. This led to a sharp decline in the growth rate of fertiliser consumption from 8% per annum during the 1980s to only about 2% per annum in the first half of the 1990s' (p 1944). He further points out that, since fertiliser is a land augmenting input, small and marginal farmers with surplus labour use it as much per hectare as large farmers. The reduction in its use following a higher price would thus imply substantial reduction in output.
20. Datt and Ravallion, op cit, note 8.
21. The sample consists of 54 households each in Andhra Pradesh and Karnataka, and 51 in Maharashtra. Three households in Maharashtra did not respond.
22. For further details, see Appendix 1 in Gaiha, op cit, note 7.
23. Given the greater representation of poverty prone groups, viz small and marginal farmers, and labourers in the sample, it is not surprising that both the incidence and intensity of poverty were (relatively) high in both years.
24. The impoverished comprised the poor who became poorer and the non-poor who became poor.
25. For details, see R. Gaiha, 'Income and expenditure switching among the impoverished during structural adjustment in India', Delhi (Faculty of management Studies, University of Delhi, mimeo, 1998).
26. The price elasticity of fertiliser demand is estimated from all-India data for the period 1970-1994 and the output-fertiliser elasticity from the ICRISAT panel survey for Maharashtra for 1989. For details, see Gaiha, op cit, note 7.
27. During the field-work in Karnataka, several farmers confirmed that, following the withdrawal of fertiliser subsidy, supplies were disrupted. As a result, farmers had to make do with small quantities of fertiliser or none at all, implying much larger production losses in the sample villages.
28. Note that the absence of a significant negative impact of adjustment on agricultural/food production is not inconsistent with more than moderate reductions in some sample villages.
29. For some econometric evidence, see Gaiha, op cit, note 7.
30. Large landholders - comprising one quarter of the ICRISAT sample - accounted for about 60% of agricultural income in the Maharashtra villages in 1989. They also accounted for close to 73% of the hired labour in these villages. Although the ICRISAT survey did not investigate whether large landholders colluded (tacitly or openly), it cannot be ruled out since their number was small. There is of course evidence of tacit or open collusion in other parts of rural India. For details, see Gaiha, op cit, notes 7 and 10 and P. Bardhan, Land, Labour and Rural Poverty (New York: Columbia University Press, 1984).
31. Large landholders - comprising one quarter of the ICRISAT sample - accounted for about 60% of agricultural income in the Maharashtra villages in 1989. They also accounted for close to 73% of the hired labour in these villages. Although the ICRISAT survey did not investigate whether large landholders colluded (tacitly or openly), it cannot be ruled out since their number was small. There is of course evidence of tacit or open collusion in other parts of rural India. For details, see Gaiha, op cit, notes 7 and 10 and P. Bardhan, Land, Labour and Rural Poverty (New York: Columbia University Press, 1984).
32. For details of the tobit analysis, see Gaiha, op cit, note 7.
33. For details, see Gaiha, op cit, note 18.
34. Rao, op cit, note 12, arrives at a similar conclusion.
35. See, for example, R. Gaiha, 'Food, prices and income in India', Canadian Journal of Development Studies, October, 1998.
36. Village panchayats have overall responsibility for the implementation of JRY but a limited one for IRDP (ie confined to the identification of the beneficiaries).
37. Even if the targeting is good, the (net) benefits would be small if there are disincentive effects (eg reduction in labour supply). For some evidence on the dependence of the poor on rural public works (or, specifically the Employment Guarantee Scheme (EGS) in Maharashtra), see R. Gaiha, 'How dependent are the rural poor on the Employment Guarantee Scheme in India?', Journal of Development Studies, Vol. 32, 1996.
38. See, for example, the applications in P. Bardhan and T.N. Srinivasan (eds), Poverty and Income Distribution in India, Sankhya, Series C, Vol. 36.
39. RPW provide wage employment in building social assets/infrastructure (eg roads, schools, wells). Usually, an explicit income criterion is not laid down on the presumption that work-requirement would by itself discourage all except the poor from participating in RPW. IRDP, on the other hand, is designed to promote self-employment through subsidised credit tied to income-generating assets (eg mostly dairy animals). An income criterion is laid down for selecting the beneficiaries. For details, see R. Gaiha 'Poverty alleviation programmes in rural India: an assessment', Development and Change, Vol. 22, 1991.
40. Using indices of F and E errors, or number of poor excluded and number of non-poor included in the scheme out of the total rural population, respectively, a similar conclusion is obtained. The F error was about 24% while the E error was a litle over 3%, yielding a combined measure of about 27%. The much larger F error points to the larger number of poor excluded than non-poor included in the scheme in question. For an exposition of the targeting errors, see G.A. Cornia and F. Stewart 'Two errors of targeting', in D. van de Walle and K. Nead (eds), Public Spending and the Poor: Theory and Evidence (Baltimore: Johns Hopkins University Press, 1994).
41. Unfortunately, the NSS data do not permit a finer classification of landholding size - in particular, of the third open-ended interval. But if participation in the Employment Guarantee Scheme in Maharashtra is anything to go by, a non-negligible share of the participants (about 16%) owned land between 5-10 hectares in 1989. For details, see R. Gaiha, 'Rural public works and the poor: the case of the Employment Guarantee Scheme in India', in S. Polacheck (ed), Research in Labour Economics (JAI Press, 1997).
42. That the landless are most poverty prone is confirmed by recent evidence. For details, see R. Gaiha and Vani Kulkarni, 'Is growth central to poverty alleviation in India?', Journal of International Affairs, Vol. 51, 1998.
43. For details of this test, see R. D'Agostino, A. Belanger and R. D'Agostino Jr, 'A suggestion for using powerful and informative tests of normality', The American Statistician, Vol. 44, 1990.
44. Similar conclusions are obtained from state-level data. For details, see R. Gaiha, 'Do anti-poverty programmes reach the rural poor in India?', Oxford Development Studies, forthcoming.
45. As in the case of RPW, the F and E errors were 24% and 3.30%, respectively, implying much larger exclusion of the poor than inclusion of the non-poor.
46. α=0 (the head-count index). For an exposition, see Ravallion, op cit, note 8.
47. Corruption is an equally serious concern in the context of IRDP. For some evidence, see J. Drèze, 'Poverty in India and the IRDP delusion', Economic and Political Weekly, 29 September 1990, and Gaiha and Kulkarni, op cit, note 34.
48. Corruption is an equally serious concern in the context of IRDP. For some evidence, see J. Drèze, 'Poverty in India and the IRDP delusion', Economic and Political Weekly, 29 September 1990, and Gaiha and Kulkarni, op cit, note 34.
49. Approval of the Gram (Village) panchayat budget by a simple majority of the Gram Sabha is mandatory in Uttar Pradesh (UP). In Maharashtra and Andhra Pradesh, however, there is a provision only for the reporting of the budget.
50. Out of the three states studied, viz Uttar Pradesh, Karnataka and Maharashtra, Maharashtra was the only state which excluded local MLAs, MLCs, and MPs from the membership of panchayat Samiti (Block panchayat) and Zilla Parishad (District panchayat). Also, the Collector (administrative head of a district) was not assigned any formal role. But, at the same time, the overall responsibility for two centrally sponsored poverty alleviation schemes, IRDP and JRY, remains vested in an official agency, District Rural Development Agency (DRDA).
51. As noted earlier, two out of the three states studied allow for inclusion of MLAs, MLCs and MPs in Block and District panchayats.
52. For details, see R. Gaiha, 'Participation or empowerment - the case of panchayats in India', Occasional Paper No. 4 (Philadelphia: CASI, University of Pennsylvania, 1996).
53. The districts covered were Gautam Budh Nagar, Mahamaya Nagar and Bulandshahar in the relatively affluent and prosperous region of Western Uttar Pradesh. Gautam Budh Nagar is the most advanced, with a well developed non-farm sector. Bulandshahar and Mahamaya Nagar, on the other hand, are predominantly agricultural. Each of these districts is highly stratified, with Brahmins and Thakurs as upper castes and Jatabs and Balmikis as lower castes. From each village, two panchayats were purposively selected. The Chairpersons and a few members of panchayats, district and village officials, and some households were interviewed. Further details will be furnished upon request.
54. This is in blatant violation of the requirement that 'Copies of the muster rolls duly certified by panchayat Head should be displayed at a public place in the villages, such as, panchayat office, a prominent wall or any prominent public place', Government of India (GOI), Jawahar Rozgar Yojana - Manual (New Delhi, 1994, p 20). The GOI, ibid further stipulates that supervisors '... should also sign the pages of muster rolls inspected by them' (p 29).
55. This is in blatant violation of the requirement that 'Copies of the muster rolls duly certified by panchayat Head should be displayed at a public place in the villages, such as, panchayat office, a prominent wall or any prominent public place', Government of India (GOI), Jawahar Rozgar Yojana - Manual (New Delhi, 1994, p 20). The GOI, ibid further stipulates that supervisors '... should also sign the pages of muster rolls inspected by them' (p 29).
56. Evidently the guidelines in the GOI, ibid were completely ignored. The Manual stipulates: 'The plans for development of villages ... should be discussed thoroughly in the meetings of the Village panchayat and the final decisions arrived at should determine the plan of works to be taken up during a particular year. While preparing the plan of works, ... highest priority should be given to works benefiting the SCs/STs, women and the other weaker sections of the village society. The Gram Sabha (village assembly) should be appraised of the progress of implementation of the programme at least twice in a year.' (p 25).
57. An observation made by J. Manor, The Political Economy of Decentralisation (Washington D.C.: World Bank, draft, 1997), in the context of decentralisation in Karnataka seems pertinent here too. Contrary to the general impression, devolution to the panchayats was associated not so much with more corruption (ie more money being diverted through corrupt means) as with greater pervasiveness of it (ie with an increase in the number of individuals who had to be bribed).
58. Drèze's, op cit, note 39, meticulous assessment of IRDP in Palanpur (UP) is equally pessimistic. His findings are: '... (1) some of the most vulnerable groups (notably the landless and households without an adult male) have practically no involvement in IRDP; (2) the poorest of the poor are largely excluded; (3) affluent households have been liberally included in the programme; (4) overall, there is no discrimination in favour of the poor in the allocation of loans.' Among various reasons, an important one is that, '... the poor are at a disadvantage in the competition for institutional loans. The poor... are not well placed to pay large bribes, fill complicated forms, influence the village headman and find themselves 'guarantors" (P A-97).
59. Not surprisingly, some of the worst-off areas in terms of unhygienic conditions were the poor settlements.
60. A glaring example of negligence is the apathy of the Gram panchayats to the Pulse-Polio Campaign of the Government of India. All Chairpersons were instructed by the District Administration to play an active part in adding to the awareness of it in the village community and ensuring its participation. This campaign was largely neglected, as the villagers interviewed reported that they became aware of it only through the mass-media. In fact, in one of the sample villages, the Chairman was absent during the entire campaign.
61. A large plot was assigned to a business family for starting a brick kiln, through a benami transfer (ie under a false name) from an old labourer, for a substantial 'fee'.
62. In another case, the cremation ground of a poor community was declared as farmland and allotted to an influential family.
63. In Gautam Budh Nagar district, it was reported, a Scheduled Caste Chairman did not transfer land to a single poor person during his tenure.
64. The Gram Sabha meetings were not publicised, their frequency was disputed, the agenda were manipulated, caste and other factors influenced important decisions, and not infrequently strong arm methods (eg intimidation, violence) were employed to force compliance.
65. One Chairperson confided that, if he did not follow the dictates of the upper castes, they would finish him off. Since the nearest police station was 8-10 km, and the head was a Rajput (an upper caste), it would be naive to dismiss such apprehensions as baseless. On the other hand, in a few cases, there was also evidence of collusion between the Chairperson and the local police.
66. In UP, for example, rural electrification is listed as an area for Gram panchayats.
67. For a systematic exposition, see P. Bardhan, The Role of Governance in Economic Development (Paris: Development Centre Studies, OECD, 1997).
68. While panchayats are in principle accountable to their communities, official agencies are not.
69. Given the uncertainty in disbursing National Rural Employment Programme funds in West Bengal, the Gram panchayats were forced to undertake very small projects - in fact, in a survey of 37 Gram panchayats, it was found that the average cost of a project was less than Rs. 2000. See J. Echeverri-Gent, The State and the Poor, (Berkeley: University of California Press, 1993).
70. (a) When there is a multiplicity of goals and functions, some of which are vaguely defined, a fuzzy equilibrium may prevail in which the agency in question does not get full credit for a good performance nor full stigma for a poor one. J. Tirole, 'The Internal Organisation of Government', Oxford Economic Papers, Vol. 46, 1994.
71. (b) Commenting on the accountability of bureaucrats to elected representatives, Manor, op cit, note 47, suggests that '... this can only be achieved if high level decentralisers empower lower level authorities to exercise influence over bureaucrats, and then back them with helpful interventions where necessary' (p 77). The experience of UP reviewed earlier, however, raises serious doubts about the workability of this proposal - especially because it underestimates the manipulative skills of bureaucrats in an unstable political environment.
72. Whether five-yearly elections would enforce greater accountability of Gram panchayats seems unlikely.
73. The UP Act is an exception in so far as it provides for the dismissal of the Chairperson of Gram panchayat by Gram Sabha.
74. For a fascinating exposition in a game theoretic formulation and a demonstration using Indian data on co-operatives, see P. Seabright, 'Is cooperation habit forming?', in P. Dasgupta and K.G. Mäler (eds), The Environment and Emerging Development Issues (Oxford: Clarendon Press, 1997).
75. R. Putnam, Making Democracy Work (Princeton: Princeton University Press, 1993), for example, is sceptical.
76. For a sample of evidence, see Seabright, op cit, note 63.
77. For an elaboration of the market-mediated land redistribution, see Gaiha, 1993, op cit, note 8.
78. Questioning the view 'success is impossible unless serious land reform precedes decentralisation', Manor, op cit, note 8, points out that, 'Prior land reform helps facilitate success, but it is patently not essential. Such institutions have also worked well in areas where land reform has made little headway, such as neighbouring Bangladesh or the Indian state of Karnataka' (p 49). In general, however, decentralisation is likely to be more effective in poverty alleviation, when land is more equitably distributed. See R. Gaiha, 'Poverty, development and participation', Asian Survey, Vol. 35, 1995.
79. Questioning the view 'success is impossible unless serious land reform precedes decentralisation', Manor, op cit, note 8, points out that, 'Prior land reform helps facilitate success, but it is patently not essential. Such institutions have also worked well in areas where land reform has made little headway, such as neighbouring Bangladesh or the Indian state of Karnataka' (p 49). In general, however, decentralisation is likely to be more effective in poverty alleviation, when land is more equitably distributed. See R. Gaiha, 'Poverty, development and participation', Asian Survey, Vol. 35, 1995.
80. Commenting on A. de Janvry's view expressed in, The Agrarian Question and Reformism in Latin America (Baltimore: Johns Hopkins University Press, 1981), that the only reliable way to achieve an increase in participation and the collective action potential of poorer groups is to increase the resources available to them through redistributive policies, Manor, op cit, note 8, argues 'Poor as well as prosperous people participate more and increase their collective action potential as a result of decentralisation even where it works mainly to the advantage of élites. Over time, the greater transparency offered by democratic systems at lower levels, the increased participation of poorer groups, and their developing skills at influencing those systems may well assist them in curbing the power of rural élites to appropriate benefits' (p 43). The point of the evidence cited below, however, is that economic betterment induces a more rapid empowerment.
81. Commenting on A. de Janvry's view expressed in, The Agrarian Question and Reformism in Latin America (Baltimore: Johns Hopkins University Press, 1981), that the only reliable way to achieve an increase in participation and the collective action potential of poorer groups is to increase the resources available to them through redistributive policies, Manor, op cit, note 8, argues 'Poor as well as prosperous people participate more and increase their collective action potential as a result of decentralisation even where it works mainly to the advantage of élites. Over time, the greater transparency offered by democratic systems at lower levels, the increased participation of poorer groups, and their developing skills at influencing those systems may well assist them in curbing the power of rural élites to appropriate benefits' (p 43). The point of the evidence cited below, however, is that economic betterment induces a more rapid empowerment.
82. M. Carr, M. Chen and R. Jhabvala (eds), Speaking Out: Women's Economic Empowerment in South Asia (New Delhi: Vistaar Publications, 1996).
83. (a) For similar evidence from Bangladesh, drawing upon the experience of women members of Bangladesh Rural Advancement Committee (BRAC) - an NGO seeking to improve the social and economic position of the rural poor through group schemes for credit and income generation - see B. Agarwal, 'Bargaining and Gender Relations: Within and Beyond the Household' (Washington D.C.: IFPRI, FCND Discussion Paper No. 7, mimeo, 1997).
84. (b) Admittedly, the evidence is limited to a few special cases, and it is a moot point whether it is amenable to generalisation. But even if it cannot be the basis of generalisation it would be a mistake to ignore it altogether.
85. For a comprehensive review of the legal framework for other rural organisations, eg co-operatives, see N.C. Saxena, 'Policy and legal reforms for the poor in India' (New Delhi: UNDP, mimeo, 1997).
86. The argument sketched above is a variant of the Tiebout model of inter-jurisdictional competition of governments, as a revelation mechanism of preferences for public goods. The critique draws upon Bardhan, op cit, note 57.
87. Maintaining up-to-date records is usually beyond the capacity of Gram panchayats. Echeverri-Gent, op cit, note 59, for example, found that at least 25% of Gram panchayats in his survey did not maintain proper records of expenditure. Nor were they able to submit utilisation certificates in time. As a result, there were considerable delays in disbursal of grants. But, if our survey of panchayats in UP is anything to go by, the absence of up-to-date accounts/records could also be partly deliberate so that the embezzlement of funds does not come to light.
88. G.K. Lieten's survey of panchayats in Muzzaffarnagar reported in 'Panchayats in Uttar Pradesh: namesake members', Economic and Political Weekly, 28 September 1996, revealed that 88% of them were new members. If this finding has some general validity - as it is likely to because of the quotas - the case for capacity-building along the lines indicated is timely and appropriate.
89. In a perceptive paper, J. Manor, 'The political sustainability of economic liberalisation in India', in R. Cassen and V. Joshi (eds), India: The Future of Economic Reform (Delhi: Oxford University Press, 1995), draws attention to the difficulty of dealing with five important interest groups. The first three of these are the groups emphasised by P. Bardhan, The Political Economy of Indian Development, Oxford, Basil Blackwell, 1984: the industrial bourgeoisie, prosperous farmers, and professionals. To these Manor, op cit, this note, adds unionised workers and the poor. Since the government cannot please them all, as a matter of strategy, it could concentrate on a large subset or an 'encompassing' coalition. No matter what the overall composition of this coalition is, the poor - especially in rural areas - must figure in it. In that case, the design and implementation of social safety nets acquire an added significance. On this, see M. Lipton, 'Liberalisation, poverty reduction and agricultural development in India', in Cassen and Joshi (eds), op cit, this note.
90. In a perceptive paper, J. Manor, 'The political sustainability of economic liberalisation in India', in R. Cassen and V. Joshi (eds), India: The Future of Economic Reform (Delhi: Oxford University Press, 1995), draws attention to the difficulty of dealing with five important interest groups. The first three of these are the groups emphasised by P. Bardhan, The Political Economy of Indian Development, Oxford, Basil Blackwell, 1984: the industrial bourgeoisie, prosperous farmers, and professionals. To these Manor, op cit, this note, adds unionised workers and the poor. Since the government cannot please them all, as a matter of strategy, it could concentrate on a large subset or an 'encompassing' coalition. No matter what the overall composition of this coalition is, the poor - especially in rural areas - must figure in it. In that case, the design and implementation of social safety nets acquire an added significance. On this, see M. Lipton, 'Liberalisation, poverty reduction and agricultural development in India', in Cassen and Joshi (eds), op cit, this note.
91. In a perceptive paper, J. Manor, 'The political sustainability of economic liberalisation in India', in R. Cassen and V. Joshi (eds), India: The Future of Economic Reform (Delhi: Oxford University Press, 1995), draws attention to the difficulty of dealing with five important interest groups. The first three of these are the groups emphasised by P. Bardhan, The Political Economy of Indian Development, Oxford, Basil Blackwell, 1984: the industrial bourgeoisie, prosperous farmers, and professionals. To these Manor, op cit, this note, adds unionised workers and the poor. Since the government cannot please them all, as a matter of strategy, it could concentrate on a large subset or an 'encompassing' coalition. No matter what the overall composition of this coalition is, the poor - especially in rural areas - must figure in it. In that case, the design and implementation of social safety nets acquire an added significance. On this, see M. Lipton, 'Liberalisation, poverty reduction and agricultural development in India', in Cassen and Joshi (eds), op cit, this note.
92. In a perceptive paper, J. Manor, 'The political sustainability of economic liberalisation in India', in R. Cassen and V. Joshi (eds), India: The Future of Economic Reform (Delhi: Oxford University Press, 1995), draws attention to the difficulty of dealing with five important interest groups. The first three of these are the groups emphasised by P. Bardhan, The Political Economy of Indian Development, Oxford, Basil Blackwell, 1984: the industrial bourgeoisie, prosperous farmers, and professionals. To these Manor, op cit, this note, adds unionised workers and the poor. Since the government cannot please them all, as a matter of strategy, it could concentrate on a large subset or an 'encompassing' coalition. No matter what the overall composition of this coalition is, the poor - especially in rural areas - must figure in it. In that case, the design and implementation of social safety nets acquire an added significance. On this, see M. Lipton, 'Liberalisation, poverty reduction and agricultural development in India', in Cassen and Joshi (eds), op cit, this note.