It would be tempting to conclude that the iron law of oligarchy was reasserting itself at the village level. But a small change in the rules changed everything. In Indonesia, in some randomly selected villages, people were formally invited to meetings through letters. This made a big difference in attendance: Turnout increased to almost sixty-five attendees on average, including about thirty-eight not from the elite. More villagers spoke, and the meetings were more animated. Moreover, some of the invitation letters included comment forms that asked about the way the KDP was being conducted, and in a randomly chosen fraction of villages, these were distributed to all schoolchildren to take home. In the rest of the villages, letters were given to the village head to distribute. When the comment forms were distributed through the schools, the average comments were significantly more critical than when they were distributed by the village heads.
If the rules make such a difference, then it becomes very important who gets to make them. If the village is left to its own devices, it seems likely that rule making would be captured by the elite. It might therefore be better for the decentralization to be designed by a centralized authority, with the interest of the less advantaged or less powerful in mind. Power to the people, but not all the power.
One specific example of such top-down intervention is to restrict whom villagers can elect as representatives. These restrictions may be needed in order to ensure adequate representation of the minorities, and they make a difference.
India’s system of village government, or gram panchayat (the GP, or village council), has such restrictions. Elected every five years at the local level, the GP administers the local collective infrastructure, such as wells, school buildings, local roads, and so on. To protect underrepresented groups, the rules reserve leadership positions in a fraction of GPs for women and for members of various minorities (including the lower castes). If the elites had completely captured the panchayat, however, mandated representation of women or minorities would make no difference. The real bosses of the villages would continue to rule, presumably fronted by their wives, or by their lower-caste servants, whenever the bosses themselves are prevented from running for office. Indeed, when Raghabendra Chattopadhyay, of the Indian Institute of Management in Kolkata, and Esther embarked on a panchayat survey in 2000 to find out whether women leaders invested in different types of local infrastructure, they were warned by everyone, from the minister of rural development in Kolkata to their survey staff (and including many local academics), that this was a futile quest. The show, everyone claimed, was run by pradhanpatis (the husband of the pradhan, or chief of the GP), and the shy, often illiterate women, many of them with their heads covered, were certainly not making any decisions on their own.
The survey, however, revealed the opposite. In the state of West Bengal, under the quota system, one-third of the GPs were randomly selected every five years to be “reserved” for women to be the village head: In these villages, only women can run for office. Chattopadhyay and Esther compared the local infrastructure available in reserved and unreserved villages, just two years after the reservation system was first put in place.27 They found that women invested much more of their (fixed) budget in the local infrastructure that women wanted—in West Bengal, that meant roads and drinking water—and less in schools. They then replicated these findings in Rajasthan, reputed to be one of India’s most male chauvinist states. There, they found that women wanted closer sources of drinking water above all, and men wanted roads. And sure enough, women leaders invested more in drinking water, less on roads.
Further studies elsewhere in India have made it clear that women leaders almost always make a difference. Furthermore, over time, women also appear to be doing more than men with the same limited budget and are reported to be less inclined to take bribes. Yet whenever we present these results in India, there is someone who will tell us this has to be wrong: They have gone personally to a village and have talked to a woman pradhan, under her husband’s supervision; they have seen political posters where the picture of the candidate’s husband figured more prominently than the candidate herself. They are right: We, too, have had those conversations and seen those posters. Forcing women to run as political leaders is not the instant revolution that it is sometimes made out to be, with powerful women aggressively taking charge and reforming their villages. The women who are elected are often related to someone who was in politics before. They are less likely to chair the village meetings, and they speak less at them. They are less educated and less politically experienced. But despite all this, and despite the evident prejudice they face, many women are quietly taking charge.
Papering over the Ethnic Divide
Our final example looks at the role of ethnicity in voting. There is reason to be concerned that voting is often based on ethnic loyalties, which means that the candidate from the largest ethnic group often wins, whatever his intrinsic merit.
To measure the extent of political advantage from ethnic prejudice, Leonard Wantchekon, a political scientist at New York University and former student leader from Benin, convinced candidates for the presidential election (whom he knew well from his student days, when they were all part of the pro-democracy movement) to give very different speeches in different villages where they ran political meetings.28 In the “clientelist” villages, the speech stressed the ethnic origin of the candidate and promised to bring schools and hospitals to the region and government jobs to his people. In the “national unity” villages, the same candidate promised to work for a national reform of the health and education sector and to work for peace among all the ethnic groups of Benin. The villages were randomly chosen to get different speeches, but all of them were in the candidate’s political stronghold. The clientelist speech was a clear winner: On average, the clientelist candidate got 80 percent of the votes, as opposed to 70 percent in the national unity villages.
Ethnic politics is damaging for many reasons. One of them is that if voters choose based on ethnicity rather than on merit, the quality of candidates representing the majority group will suffer: These candidates don’t need to make much of an effort because the fact that they are from the “right” caste or ethnic group is sufficient to ensure that they are elected. The Indian state of Uttar Pradesh, where politics became increasingly caste-based in the 1980s and 1990s, provides a clear illustration of this. Over time, there was a very large increase in the level of corruption among winning politicians from the numerically dominant caste group in all areas.29 It did not matter whether that area was dominated by the lower caste or by the upper caste: The winners from the dominant group were more likely to be corrupt. By the 1990s, one-fourth of the members of the Legislative Assembly had a criminal case lodged against them.
Is it inevitable that voting in developing countries will end up being dominated by ethnicity? There is a long tradition of scholars who think so. Their view is that ethnic loyalties are the basis of traditional societies and are bound to dominate political attitudes until the society modernizes. 30 Yet the evidence suggests that ethnic voting is not as entrenched as is often believed. In one experiment in Uttar Pradesh during the 2007 state elections, Abhijit, Donald Green, Jennifer Green, and Rohini Pande worked with an NGO that ran a nonpartisan campaign (using street plays and puppet shows) around a simple slogan, “Don’t vote on caste, vote on development issues,” in randomly selected villages. This simple message reduced the probability that voters would choose a candidate from their own caste from 25 percent to 18 percent.31
Why do some people vote based on caste but readily change their minds when an NGO asks them to rethink? One answer is that, often, voters actually know very little about what they are choosing—they have typically never met the candidate except at election time, when everyone shows up and makes more or less the same promises. There is no obvious mechanism for finding out, for example, who is corrupt and who is not, and there is a tendency to assume that everyone is equally corrupt. Nor do voters know very much abou
t the actual powers of the legislators: In India, we have often heard urban dwellers blaming the state legislator for the condition of the drains in their slums, when in fact it is their local legislator who is supposed to take care of such problems, with the result that legislators feel that they will be blamed for whatever goes wrong, which does not create a strong incentive to perform.
Given that all the candidates look more or less the same to voters (and perhaps equally bad), the voters may feel that they might as well vote on caste: There is a small chance that caste loyalty will pay off and the politician will help, and in any case, what do they have to lose? But many of them probably don’t feel particularly strongly about it, which is why they are also easily swayed.
Brazil is one country that has tried to provide voters with useful information about candidates. Since 2003, every month, sixty municipalities are drawn at random in a televised lottery, and their accounts are audited. These audit results are made public through the Internet and the local media. Being audited hurts corrupt incumbents. In the 2004 election, they were 12 percentage points less likely to be elected if their audit was revealed before the election. Honest incumbents, on the other hand, were 13 percentage points more likely to be elected if their audit results were revealed just before an election. Similar results were found in the slums of Delhi: Voters who were informed about the performance of their incumbents voted against incumbents when they had done poorly.32
So politics is not very different from policy: It can (and must) be improved at the margin, and seemingly minor interventions can make a significant difference. The same kind of philosophy we have advocated throughout this book—attend to the details, understand how people decide, and be willing to experiment—applies as much to politics as it does to everything else.
AGAINST POLITICAL ECONOMY
Political economy is the view (embraced, as we have seen, by a number of development scholars) that politics has primacy over economics: Institutions define and limit the scope of economic policy.
However, as we have just shown, there is scope for improving the functioning of institutions, even in relatively hostile environments. Obviously, not all the problems will be solved in this way. The fact that there are powerful people who stand to lose from the reforms does impose limits on how far you can take things, but there is a lot that remains possible: The politicians in Brazil who were going to be exposed by the audit did not manage to stop the legislation, nor did the newspapers in Delhi balk at publishing the records of the legislators. In Indonesia and China, the autocratic regimes themselves decided to allow a measure of democracy. The important lesson is to take advantage of whatever slack there is. The same is true for policies. Policies are not completely determined by politics. Good policies (sometimes) happen in bad political environments. And, perhaps more important, bad policies (often) happen in quite good ones.
Suharto’s Indonesia is an example of the first point. Suharto was a dictator and was known for being particularly corrupt. Whenever he fell seriously ill, the stock market values of the companies owned by his relatives fell, which clearly shows that being connected to him was valuable. 33 Despite this, as discussed in Chapter 4, it was in Suharto’s Indonesia that oil money was used to build schools. Suharto thought that education was a powerful way to diffuse an ideology, impose a unified language, and create a sense of unity in the country. The policy, as we have reported, led to an increase in education and, for the generations that benefited from this schooling, an increase in wages. The education expansion was accompanied by a massive program promoting better nutritional practices for children, in part by training 1 million village volunteers who were supposed to bring the message to their villages. Perhaps in part because of this intervention, malnutrition in children was halved in Indonesia over the 1973–1993 period. The point is obviously not to claim that Suharto’s regime was good for the Indonesian poor, but merely to underscore that the motivations of the political elites are complex enough that it may be in their interest, at a particular time and place, to implement some policies that happen to be good for the poor.
And, once again, the converse holds as well. Good intentions are probably a necessary ingredient for good policies, but they only go so far. Very bad policies are sometimes born out of the best of intentions, because of a misreading of what the real problem is: Public school systems fail the majority because everyone believes that only the elite can learn. Nurses never come to work because no one tried to make sure that there was demand for their services and because of unrealistic expectations about what they can do. Poor people have no safe place to save because the regulatory standards that governments set for institutions that are allowed to legally accept their savings are absurdly high.
Part of the problem is that even when governments are well intentioned, what they are trying to do is fundamentally difficult. Governments exist to a large extent to solve problems that markets cannot solve—we have already seen that in many instances government intervention is necessary precisely when, for some reason, the free market cannot do the job. For example, many parents may not end up immunizing their children or giving them deworming pills, both because they do not take into account the benefit this would have for others and because of the time inconsistency problems we discussed in Chapter 3. They may not choose the right level of education for their children, in part because they are not sure the children will be able to repay them after they have grown up. Firms would rather not operate their effluent treatment plant, partly because it costs money and partly because they don’t really care if the water is polluted. At an intersection, we would rather go than stop at the red light. And so on. As a result, the agents of the government (the bureaucrats, the pollution inspectors, the policemen, the doctors) cannot be paid directly for the value they are delivering to the rest of us—when a policeman gives us a ticket, we complain, but we don’t offer him a reward for doing his job well and keeping the roads safe for everyone. Contrast this with the grocery store owner: She delivers value by selling us eggs, and when we pay her for the eggs, we know we are paying for the social value she is delivering.
This simple observation has two very important implications: First, there is no easy way of assessing the performance of most people who work for the government. This is why there are so many rules for what bureaucrats (or policemen, or judges) should and shouldn’t do. Second, the temptation to break the rules is ever present, both for the bureaucrat and for us, which is what leads to corruption and dereliction of duty.
The risk of corruption and neglect is thus endemic in any government, but it is likely to be more severe in three circumstances: First, in cases when the government is trying to get people to do things whose value they don’t appreciate, such as wearing a helmet on a motorcycle, or immunizing a child. Second, when what people are getting is worth a lot more than they are paying for it; for example, a hospital bed provided free to those who need it, regardless of income, invites a bribe from richer people who want to jump the queue. Third, when bureaucrats are underpaid, overworked, and not well monitored, and have little to lose by getting fired anyway.
The evidence of many of the previous chapters suggests that these problems are likely to be more serious in poor countries. Lack of the right kind of information and a history of government failures make people trust the government’s diktats less. Extreme poverty makes it necessary to give away a lot of services at well below market prices. And people don’t know what their exact rights are, so they cannot effectively demand or monitor performance; governments have limited resources to pay bureaucrats, and so on.
This is one important reason why government programs (and similar programs run by NGOs and international organizations) often do not work. The problem is inherently difficult and the details need a lot of attention. Failures are often not the result of sabotage by a specific group, as a lot of political economists would have it, but come about because the whole system was badly conceived to start with and no one has ta
ken the trouble to fix it. In such cases, change can be a matter of figuring out what will work and leading the charge.
Absenteeism among health workers is a perfect, if tragic, illustration. You may remember, from Chapter 3 on health, the nurses in Udaipur District who were upset with us because we were part of a project that was trying to get them to come to work. As it turned out, they got the last laugh: The program we were working on with the local government and the NGO Seva Mandir was an utter disaster.
The program had started when, after seeing data we had collected with Seva Mandir, which showed that nurses were absent at least half the time, the head of the district administration decided to tighten up the rules for nurse attendance. Under the new regime, the main nurse was supposed to be at the center for the entire day for one day a week, on Monday. On this day, she was not allowed to make home visits to her patients (often a convenient excuse to avoid coming to work). Seva Mandir was charged with monitoring attendance: Each nurse was given a time-and-date stamp and was asked to stamp a register affixed to the wall of the center several times a day on Mondays to prove her presence. Those who didn’t show up at least 50 percent of the time would get their wages docked.
To see whether this new policy made a difference, we sent independent survey researchers to record absence both in the centers that Seva Mandir was monitoring and in the other centers (where the same rules applied in principle but where there was no monitoring).34 Initially, everything went according to plan. Nurse attendance, which was around 30 percent before the launch of the program, jumped to 60 percent by August 2006 in centers where Seva Mandir was monitoring, but it remained unchanged elsewhere. Everyone (except the nurses, as they clearly let us know on the day we met them) was quite elated. Then, sometime in the month of November, the tide turned. Nurse attendance in the monitored centers started to drop, and kept dropping. By April 2007, the monitored and unmonitored centers were performing exactly the same—equally badly.
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