This paper uses a 2,250 household survey nested within a close elections regression discontinuity design in the Indian state of Rajasthan to study the role of political connections in shaping the performance of the National Rural Employment Guarantee Act (NREGA), the world’s largest rural workfare program. Households in constituencies barely won by the ruling party reported a large relative increase in receipt of employment and payments under NREGA, driven mainly by increased project approvals and wage rates. The ruling party effect was concentrated in (i) villages with a co-partisan village council leader and (ii) villages with higher levels of local democracy as measured on a novel survey-based index. The findings reveal the important role that political networks as well as local democracy play in greasing the wheels of large-scale anti-poverty programs.
Dasgupta, A. Strategically Greasing the Wheels: the Political Economy of India’s Rural Employment Guarantee. International Growth Centre (IGC), London, UK (2016) 18 pp.