Issues in economic governance:Why does program delivery vary

across states?

Regina Birner

Professor of Social and Institutional Change in Agricultural Development, University of Hohenheim, Germany

IFPRIState-level Hunger

Index

Why do development problems persist in spite of considerable investment by

the government to address them?

What to do about it?Learning from the reform experience of

different states

Overview

1. Introduction• Variation in governance across states

2. Conceptual framework

3. Insights from empirical research in Bihar & Karnataka• Rural services and program delivery• Survey and case study findings

4. Policy implications

India Today - State of States Ranking (Score)

Composite of 8 economic, social and governance indicators

India Today 2009

Government of India (2002). National Human Development Report 2001. New Delhi: Planning Commission. (Composite of five indicators)

Gender Equality

Perceptions of CorruptionFindings from a Transparency International survey

Transparency International India – Center for Media Studies (2005)

Absentee rates of personnel in primary schools and health care centers

Source: World Development Report 2004

Access to agricultural extension

Source: NSSO State of Indian Farmer Survey (2005:6)

Other types of indicators

• Examples:

• Actual use of funds from centrally sponsored schemes, such as the National Rural Employment Guarantee Scheme

• For example, Bihar did not use substantial amounts due to problems to comply with implementation regulations

• Access to services measured using Citizen Report Cards (Public Affairs Centers)

• Targeting performance in government schemes, such as the Public Distribution System or the Integrated Child Care Services Scheme (ICDS)

Why does program implementation differ

across states?

Conceptual framework

Conceptual Framework

Performance of services and

programs* Priorities* Quality

* Efficiency* Equity

* Sustainability

Ability of citizens to

demand and supervise services

Capacity of administration to finance and

supply services

good fitCharacteristics of service providers

Characteristics of local

communities

good fit Demand-side reform

approaches

Supply-side reform

approaches

Contextual factors•Education levels•Social structure (Inequality, exclusion)•Political conditions •Level of economic development

Vicious cycle

Reforms to improve capacity for service

delivery(e.g., staff, qualification,

incentives)

good fit

Reforms to improve voice &accountability(e.g., reservation rules,

community empowerment)

Understanding the problems of program implementation:

Example: National Rural Employment Guarantee Scheme (NREGA)

Case study: Bihar

Study team: Regina Birner, K.G. Gayatrhidevi (ISEC), Madhushree Sekher (TISS),

Katharina Raabe, Neeru Sharma (ex-IFPRI), Amrita Shilphi (Institute of Dalit Studies)

ApproachStudy site: District Nalanda, Bihar

• Village case study• Focus group: Gram Panchayat and Block Panchayat

representatives, villagers, Block public official• Process Net-Map with focus group

• Process of implementing NREGA is mapped step-by-step on a large sheet of paper, based on focus group information

• Arrows are used to describe actions needed for implementation• Carom board pieces are used to visualize risks of leakage and other

implementation problems• Follow-up discussions with different stakeholders

• Workers• Gram Panchayat representatives• Public officials

Zilla Parishad

Labor GroupFarmers’ Committee

Gram Panchayat

Block Program O.

Employment Worker

Block Dev. Officer

Block Panchayat

Overseer

1

1. Decide about NREGA activity, inform

2

2. Send proposal for approval

3

3. Inform about approval

4

4. Inform about start of work

5

5. Ask for estimate

6

6. Goes to village, makes estimate 7. Informs about estimate

7

8

8. Calls, gives advance money

9

9. Informs about advance

10

10. Inform to get people ready

11

11. Issue employment cards, maintain attendance sheet

12

12. Supervises money flow

13

13. Measures work (maintenance book)

14

14. Informs about work done

15

15. Provides money for work (signs checks)

16

16. Informs about money received17. Distributes money

(3)

(3.) (System before hiring Block Program Officer)

Zilla Parishad

Labor GroupFarmers’ Committee

Gram Panchayat

Block Program O.

Employment WorkerBlock Panchayat

Overseer

1

1. Decide about NREGA activity, inform

2

2. Send proposal for approval

3

3. Inform about approval

4

4. Inform about start of work

5

5. Ask for estimate

6

6. Goes to village, makes estimate 7. Informs about estimate

7

8

8. Calls, gives advance money

9

9. Informs about advance

10

10. Inform to get people ready

11

11. Issue employment cards, maintain attendance sheet

12

12. Supervises money flow

13

13. Measures work (maintenance book)

14

14. Informs about work done

15

15. Provides money for work (signs checks)

16

16. Informs about money received17. Distributes money18. Last year

Risk of leakage(in total, 30% ofNREGA funds)

10

88

Governance reforms in Bihar under Nitish Kumar (from 2005 onwards)

• “Supply-side reforms”

• Bringing back experienced IAS officers

• Modernizing administrative procedures, e.g., computerizing the treasury

• “Demand-side reforms”

• Far-reaching decentralization and community empowerment

• Gram Panchayat (GP) councils get authority to hire and supervise primary school teachers and aganwadi workers

• User groups have to sign attendance sheets prior to salary payments

• Challenge: GP presidents and council members demand bribes

• 50% reservation for women in Panchayati Raj institutions

• Challenge: Build capacity of elected representatives

• Results: Too early to judge – governance reform is a long-term process

• Conclusions: Political will at the top level matters!

• But need to address the challenges inherent in each reform

Complaint mechanism – Bihar (Madhubani)

Effort to improve government responsiveness * Driven by the Chief Minister* People come to District Offices to have problems resolved on the spot* Evidence of challenges of this approach

Governance reforms in Karnataka

Results from a survey

with ISEC and TISS

Study team: Regina Birner, K.G. Gayatrhidevi, Nethra Palaniswamy, Katharina Raabe and

Madhushree Sekher

Background

• Karnataka: Leader in decentralization• Decentralization precedes constitutional reforms• Transfer of authority for funds, functions and

functionaries to local governments for all subjects• Strong emphasis on training elected Panchayati Raj

members using innovative methods• Efforts to empower community-based user groups

• Study approach• Case study to understand local procedures• Survey among households (ca. 1,000), community-

based organizations, elected officials and administrative staff

Survey in five sectors in Karnataka 2008

Department Service Field-level staff

No Senior officials

No User organization

No

Agriculture Agricultural extension

Agricultural Extension Workers

41 Assistant Director of Agriculture

34 Farmer Coop.

20

Animal Husbandry

Livestock services

Veterinary Assistants

40 Assistant Director, Animal Husbandry

30 Dairy Coop. 29

Food and Civil Supplies

Public distribution system

Food Inspectors

34 Block Food and Civil Supplies Officer

26 VigilanceCommittee

40

Women and Child Development

Anganwadi (child care) centers

Anganwadi Workers

50 Child Development Project Officer

36 Women’s group

37

Rural Development and PR

Drinking water and sanitation

Junior Engineers

41 Assistant Executive Engineer

29 Water and Sanitation Committee

50

Total 206 155 176

Challenge of demand-side reforms: Targeting Problems of Local Public Expenditures

• Analysis of fiscal grants to Gram Panchayats (by Nethra Palaniswamy and Nandini Krishnan)

• Question: • Is there elite capture in the allocation of funds to Gram

Panchayats and to villages within Gram Panchayats?• Allocation to Gram Panchayats: Formula• Allocation to villages within Gram Panchayats:

Decision of Panchayat council without rules or formula (negotiation)

• Results• Formula-bound targeting to Gram Panchayats works well• Elite capture for targeting at the village level

Allocation of expenditure across villages

How inclusive are community-based organizations?

Page 25

Challenges on the supply side:Age profile of frontline service providers

Page 26

Education level of service providers

Page 27

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Agricultural extension worker (N=41)

Veterinary assistant (N=40)

Junior engineer (N=41)

Food Inspector (N=34)

Anganwadi worker (N=51)

Middle school High school Diploma/vocational training Pre-degree Bachelor Master

Only 17% in agriculture or biology

Constraints identified by service providers(Karnataka)

Junior Engineer

Agric. Extension Worker

Vet. Assistant

Food Inspector

Angan-wadi Worker

Lack of staff 39% 88% 75% 65% 4%

Political interference

51% 51% 40% 71% 6%

Lack of funds 27% 7% 18% 12% 12%

Inadequate work environment

10% 5% 6% 10% 8%

Complex admin. procedures

7% 7% 8% 3% 2%

Assessment of severity of constraints

Severity of

constraintJunior

Engineer

Agricultural Extension Worker

Veterinary

AssistantFood

InspectorAnganwadi

Worker

Lack of staffModerate 38% 11% 23% 45% 100%

Strong 63% 89% 77% 55% 0%

Political interference

Weak 5% 0% 0% 4% 0%

Moderate 38% 67% 63% 46% 33%

Strong 57% 33% 38% 50% 67%

Analysis of the reports of the Second Administrative Reform Commission:•Few suggestions that address political interference

Page 30

Junior Engineer

Agricultural Extension Worker

Veterinary Assistant

Food Inspector

Anganwadi Worker

The staff of your Department is hired purely on the basis of merit.

Strongly agree 17 12 35 29 46Agree 61 80 50 56 50Disagree 7 2 8 9 4Strongly disagree 10 0 5 0 0

The staff of your

Department is promoted

purely on the basis of merit.

Strongly agree 2 0 8 9 32Agree 17 10 13 6 32Disagree 59 83 58 71 20Strongly disagree 22 7 23 15 6

Staff perceptions on recruitment and promotion (percentage of respondents)

Conclusions

• Evidence that service provision and program implementation differs widely across states

• Capacity of citizens to demand services and ability of the state to deliver services differs across states

• Risk of a vicious cycle

• Opportunities to break the vicious cycle

• Demand-side governance reforms

• Supply-side governance reforms

• Insights from the research

• Political incentives crucial – need to understand them better!

• Both demand-side and supply side reforms are needed.

• Each reform involves its own challenges!

• Good governance is a matter of checks and balances!

Thank you!

State of states ranking - methodology

• Prosperity and budget

• percentage of population above poverty line, percentage of urban population, per capita capital expenditure, inflation, per capita debt, per capita GSDP, per capita revenue of SEB;

• Law and order

• (number of policemen per lakh people, ratio of cases filed to pending cases in district and lower courts, share of murders, kidnappings, rapes and molestations to total cognisable crimes);

• Health

• (infant mortality ratio or imr, ratio of male IMR to female IMR, percentage of births assisted by trained personnel, percentage of homes having tap water as principal source of water, registered doctors per million population, sex ratio and per capita expenditure on health and family welfare by state Government)

State of states ranking

• Education

• (literacy rate, proportion of 10-plus children having completed primary education, ratio of boys to girls in elementary school, teacher-pupil ratio and expenditure on elementary education per 6 to 14-year-old);

• Consumer market

• (households owning TVs, number of affluent households in urban and rural areas, per capita deposits in banks and per capita ownership of two-wheelers);

• Agriculture

• (percentage of cultivated area under cash crops, agriculture GSDP per rural population, agriculture electricity consumption per rural population, foodgrain yield, loans extended to farmers and net irrigated area);

• Infrastructure

• (percentage of homes with electricity, percentage of villages connected with pucca roads, per capita road length, bank branches, LPG connections, post-offices and telephones);

State of states ranking

• Investment • (per capita capital expenditure, commercial bank credit and gross

capital formation in manufacturing, ratio of factories to number of disputes, ratio of industrial workers to urban 15-59 population, and percentage of sickness).

“Towers” of carom game pieces visualize levels of leakage in which

different actors could be involved

Arrows show implementation

activities

Actors involved are identified and marked on sheet of paper

Fotos: E. Schiffer

Professional contacts of extension agents (by development level of Block)

Page 38

during past year

Challenges of demand-side reforms: Membership in community organizations

Page 39