Working Paper: NBER ID: w25687
Authors: Martin Ravallion
Abstract: Evidence on the implementation of India’s National Rural Employment Guarantee Act suggests that the available work is often rationed by local leaders in poor areas, and that this is an important factor limiting the scheme’s impact on poverty. The paper offers explanations for this empirical finding, with likely relevance to other decentralized, rights-based, programs. It is shown that rationing of work opportunities can arise under decentralized implementation in poor places even when the center wants to honor the employment guarantee. Two main drivers of such rationing are identified: local administrative costs and local corruption. Administrative reforms by the center can have perverse effects. Policy implications are drawn for how to better assure that the stipulated rights are attained in practice.
Keywords: Right-to-work; Employment guarantee; Poverty reduction; Decentralization; Corruption
JEL Codes: H53; I38; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| local administrative costs (H79) | rationing of work opportunities (J68) |
| corruption (D73) | rationing of work opportunities (J68) |
| central government commitment to providing work (J68) | local officials' rationing of work (D45) |
| local administrative costs (H79) | availability of work (J29) |