Abstract
Despite the presence of various social safety net programs, Indian households are not resilient to daily risks and exogenous shocks. To understand the incommensurate success of Indian social welfare programs in improving resilience, we focus on key elements of the policymaking process—ideas, interests, and institutions—in this chapter. We deliberate upon the ideas which motivate social welfare programs, the institutions responsible for delivering welfare benefits, and the political interests which shape program design and effectiveness in the country. Building upon arguments around policymaking process and the implementational hurdles, we highlight the importance of citizen-state social contract, local institutions, subnational politics, civil society activism, and state capacity in shaping the focus, form, and scope of social welfare policies.
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Introduction
Despite the array of social safety nets—each addressing a particular feature of human deprivation—why do India’s poor and those close to poverty continue to be vulnerable to economic uncertainty with long-lasting adverse consequences? There are two ways to answer this. First, social welfare programs are often inefficient in reaching their citizens of focus (targeted beneficiaries), which could emerge from flaws in design (form), corruption, or ineffective implementation. Second, the social welfare programs may not alone be sufficient to create development resilience (scope) and require other enablers to work in unison. In this chapter, we would focus on the first explanation, which has often been attributed to the poor performance of social welfare programs in the country.
Let us consider some facts. Forty percent of grains earmarked for the poor through PDS fails to reach its beneficiaries.Footnote 1 There remains a substantial unmet demand for work at MGNREGS in many of the poorest regions. It is often reported that wage payments at the MGNREGS sites is either delayed or paid a lower amount than stipulated.Footnote 2 The quality of school meals under MDMS remains nutritionally poor and hygiene quality remain a lingering concern. ICDS centers are known to be understaffed, and Anganwadi workers grossly underpaid, overworked, and demotivated to adequately fulfill their ever-increasing responsibilities as caregivers, teachers, and health workers, all at the same time.Footnote 3 A larger share of the poor is still unaware of the benefits of the health insurance program, and incapable to figure out the rigmarole of what coverage it provides, the associated costs of care, and the risk of being overcharged for seeking healthcare.Footnote 4 Maternity benefits, despite using computerized payment methods frequently get transferred to wrong bank accounts.Footnote 5 Most importantly, the inability to prove their poverty status arising from complex paperwork debars the poor from availing any benefits meant for them.Footnote 6 These are not field anecdotes or isolated journalistic accounts but generalizable findings across multiple academic research papers and reports which highlight the fledgling but poorly developed India’s social safety nets architecture. Yes, there are exceptions—some states do a better job and protecting the poor—yet for most of the poor, the transformational impact of the social welfare schemes remains illusory.
This chapter focuses on these bottlenecks—design faults and implementational hurdles—which limit the effectiveness of social welfare programs and thereby development resilience. Our proposed answers are grounded in a careful analysis of policy ideas—conceptualization of the nature of citizen-state social contract on the subsistence floor—and the institutional structure—responsible for designing and implementing the programs—which undergirds the success of any social welfare system.Footnote 7
Ideas, Institutions, and Interests
The challenge of public policy is to come up with an idea on how to utilize key welfare institutions—markets, state, and society—to support citizen welfare.Footnote 8 In the context of low- and medium-income countries, markets are underdeveloped, and societies provide mutual social insurance to its members. State, therefore, takes a ‘developmental’ role where its primary responsibility is not only to protect property rights, and maintain law and order, but also ‘to be a guide, coordinator, stimulator, and a catalytic agent for economic activities’ … [because, for]…various historical and structural reasons, the development process [in such contexts] has been atrophied and the path forward is darkened by all kinds of missing information and incomplete markets' (Bardhan 2016, pp. 864). Implicit in this arrangement, are the ideas around rights and obligations—explicit or implicit—of the state toward its citizens, referred to as the citizen-state social contract.Footnote 9
There is wide variation in the nature and strength of social contract as high inequality, weak civil society, and entrenched elite interests perpetuate non-democratic institutions and therefore weaken the bargaining power of citizens with the state.Footnote 10 A citizen-oriented social contract, on the other hand, promotes equal opportunity, economic empowerment, and social cohesion, with a greater role of social protection against economic insecurity. Ideas around the nature of social contract and redistributive welfare policy are, however, imbedded in the contextual political, and socio-cultural norms or economic needs thereby determining the nature of welfare mix while the effective implementation necessitates appropriate governance arrangements which includes allocation of funds, assignment of responsibilities, enactment of regulations, and local bureaucratic appointments to deliver the welfare services. Long-term success of such a design hinge on the cohesiveness of ideas around redistribution, political commitment to those ideals, and a capable state to efficiently implement welfare programs. This is only possible through a perfect trifecta of ideas, interests, and institutions aligned to enact, deliver, and innovate on the social welfare policies for human resilience which is a central challenge for the developing countries with poor institutions, vested political interests, and often ill-conceived ideas around welfare.
Borrowing from the textbook models of policymaking, we present a framework in Fig. 8.1 to describe the intricate linkages across ideas, institutions, and interests which determine the focus, form, and scope of social welfare policies and its reform over time.Footnote 11 We argue that while the ideational process is a culmination of the collaboration between macro-level ideas and institutions, and the influential interest groups they foment, implementation of welfare schemes depends upon the program design and local institutions—state capacity, bureaucratic effectiveness, and the nature of social contract.Footnote 12
Ideas Set Forth the Welfare Agenda
Ideas, simply put, represent the historically formed cognitive beliefs, perceptions, and the intrinsic values held by the policy actors which allow them to frame their understanding of the social problem, and offer suggestions, thereby initiating an ‘agenda setting’ process (Kingdon and Stano 1984). Policy ideas—the preferred ideological narrative of the policy actors within the nature of citizen-state social contract—are formed with respect to the national economic transformation (declining importance of agriculture, industrialization, urbanization, changing demographic share of the population, etc.) which create newer forms of vulnerability, along with transnational influences such as global consensus on certain development goals, international aid, or transferable policy learnings on best practices in program delivery.
Despite distinct models of welfare policies in the advanced nations, they have all been associated with the structural issues with the labor markets and economic change in the wake of industrialization (Esping-Andersen 1990). East Asian economies of Japan and Korea too developed ideas around a more expansive social welfare programs in response to changing economic realities following the democratic reforms of 1993 and 1987, respectively (Kwon 1997). Among the developing economics, social welfare programs in a majority of Latin American countries were introduced as a result of the economic crises in 1990s which led political actors to develop newer ideas around reductions in poverty and inequality which led to the popularity of conditional cash transfers (Barrientos 2009; Levy and Schady 2013).
The influence of transnational organizations in influencing the design of domestic policies is conspicuous. International organizations such as the International Monetary Fund (IMF) or the World Bank propagated targeted social protection schemes with a focus on the poor in most developing countries including India in the 1990s. The same institutions are now promoting a case for universal and guaranteed social protection highlighting the rights-based ideas of social security of every citizen (World Bank 2019). This shift in policy ideals reflect the changing global paradigm in favor of human rights and dignity of citizens as a basis of social protection against the earlier views around fiscal profligacy. Similarly, international donor organizations have also influenced the expansion of social welfare programs while in some cases countries there is a diffusion of social policy ideas across nations (Graham 2002; Weyland 2005).Footnote 13
The perceptions of current development challenges (or the scope of the social problem), identification of the deserving beneficiaries (focus), and the nature of prescribed solutions (form) to it—cash benefits, food transfers, old age pensions, social health insurance—therefore reflect the underlying ideas of the policymaker around the nature of welfare mix to be designed in a particular economic and political context.
Institutions: Conduit of Welfare
Scholarship on the role of institutions for long-run economic development and growth is vast.Footnote 14 Institutions referred as to the set of ‘rules and norms’—formal (property rights, legal codes, democratic constitution, bureaucracy, etc.) and informal (social sanctions, customs and traditions, and corruption among others)—shape and govern political and economic exchange in a society. Some institutions ease the challenges of coordination, while others could be disruptive to fair exchange.Footnote 15 Policy actors prescribe their policy ideas with regard to their understanding of the presence of institutions and their effectiveness.
During the ideational process, supra-institutions—legislative frameworks, political system, and financial strength as—determine the framing of policy paradigms. These supra-institutions, backed by legal frameworks, are influenced by a multitude of ideas—constitutional democracy, electoral systems, federalism, bureaucratic structure, citizen rights, etc.—which are aligned with the nation-state’s cultural norms, religious practices, or social structure.Footnote 16 Local institutions, on the other hand, mediate the delivery of welfare policies. Formal state machinery—bureaucrats, elected representatives, non-governmental service providers, etc.—and its interaction with the informal social norms and practices governs the everyday nature of exchange between citizens determine the success of local institutions. But local traditions, rituals, and entrenched hierarchies often inhibit fair terms of exchange within societies and resist formation of voluntary associations which lowers the quality of citizen-state engagements. It could also abet bureaucratic corruption, identity-based discrimination, and poor grievance system which implies that welfare recipients are often deprived of their entitlements.Footnote 17 The unevenness in the performance of local institutions, therefore, has been attributed to the divergence local state capacity for improved well-being (Bardhan 2016).
Perverse Interests Undermine the Welfare Agenda
Policies create politics through a feedback process. The emerging politics could potentially shape policy outcomes depending upon whether it benefits the masses or the elite interest groups (Campbell 2012).Footnote 18 Where institutions are poorly developed and state accountability is low, institutions are prone to being manipulated for political interests thereby reducing the policy process—from ideation to delivery—an inherently political exercise. Supra-level institutions create strategic opportunities for the political actors to further their interests, be it maximizing electoral gains, claim rule legitimacy, or social mobilization. As a result, there is often resistance to a necessary change among the elites, causing stasis in the ideational process much to the detriment of long-term development. The institution of federalism adds another layer to the politics of welfare policies with its own distinct subnational policy ideas, institutional norms, and political interests.Footnote 19
Local interests are often served through clientelistic practices, elite capture, and street-level bureaucratic inefficiencies may undermine the success of well laid out policy design of formal supra-institutions through discrimination, rent seeking, and corruption in service delivery. To avoid the last-mile delivery concerns—rampant in the developing countries—the citizen-state social contract, as designed at the supra level, needs to be supplemented with sufficient motivation, incentive, and accountability of local state institutions.Footnote 20 Developing local state capacity through democratic institutions such as decentralization of governance which empower citizens and increase accountability are therefore essential to improve delivery. Empowered citizens imply greater voice to the citizens in building a more compact social contract further influencing ideas around the focus, form, and scope of social welfare policies.
Ideas, Institutions, and Interests Co-evolve
Policymaking process is not static, yet it is a slow or gradual process constantly evolving in response to changing economic, political, and institutional considerations.Footnote 21 Ideas, too, instead of being dogmatic ideological stances, are shaped by (and also shape) the institutions and interests within the emerging policy paradigms over time.Footnote 22 Some perpetuate vested interests thereby inhibiting change, while others force their way into civic consciousness.Footnote 23 For example, the emergence of universal concepts (such as human rights, malnutrition, or social inclusion) or specific group-based upliftment ideals (elderly, or marginalized ethnicities) have created broad-based moral consciousness around the need for a ‘social minimum.’ Accepting these goals as ‘socially desirable’ creates a political consensus around the need for appropriate institutions, the design of which—in the form of delivery or the beneficiary focus—might still differ across ideas held by the policy actors. The disagreement may be mediated by the respective interests of the policy actors in establishing the policy paradigms at a specific point in time. While short-term vested interests might hinder change, ideas can potentially act as catalyst for long-term change, especially when the policy actor stands to gain from it in the future.Footnote 24
Long-Term Success of Social Welfare Programs
Long-term success of social welfare strategies requires the emergence of a compact social contract with clearly articulated ideas around the role of state and its commitment to social welfare, along with the institutional apparatus to identify and deliver welfare to the intended beneficiaries. Such a social contract requires broad-based political support and democratic consensus across policy actors and citizens on what ought to be the socially desired ‘basic minimum.’ These deliberations are however an ongoing process—which includes the challenges of developmental priority, institution building, political bargaining, and fiscal considerations—amid which the form, focus, and scope of social welfare programs are determined.
While the short-term success of social welfare programs is often measured through a combination of many attributes—namely, appropriateness, adequacy, equity, cost-effectiveness, incentive compatibility, sustainability, and dynamism—long-term benefits include not only a reduction in poverty and extent of deprivation but also a reduction in the future likelihood of falling into poverty, along with empowering citizens, thereby building development resilience.Footnote 25 There is no golden rule, however, for what is the most appropriate form or an adequate amount of social transfers. It depends upon the developmental challenge at hand—extent and nature of deprivation—and the government’s ideas (or solutions) around what should be the minimum subsistence floor for its citizens (scope), who are the people in need (focus) and how to best help achieve that (form). When the policy actors do not have a perfect understanding of the ‘developmental problem’ or the financial and institutional wherewithal to address it—which is most often the case in developing countries—policy ideas are often a kind of experiments—suited to the interests of the policy actors, even when informed by theory—with uncertain outcomes. The proposed ideas around welfare therefore emerge and evolve within a particular form of economic, social, and political setting where good ideas often clash with perverse interests.Footnote 26
Diagnosing Incommensurate Welfare Outcomes
The framework presented in Fig. 8.1 is useful to understand the disconnect between social safety net policies, their implementation, and the actual welfare outcomes in India. We use it to make two points. First, we argue, as we have done throughout the book, that social welfare programs in the country have a short-term focus, and myopic approach toward sustainable development. A weak social contract has only provided band-aid solutions to poverty reduction with little recognition to long-term strategy toward human capability and resilience building. Second, the fledgling social welfare architecture is further handicapped by poor institutional arrangements—weak state capacity—to deliver the welfare benefits. Unless the local institutions—social and political—are empowered sufficiently, elite ideas driven ideational process might not be able to achieve broad-based success—in implementation, as well as impact.
Fledgling, Yet Feeble ‘Social Contract’
India’s centralized economic planning, in the early years of its planning period, prioritized economic growth over redistribution with the idea that fruits of economic growth would trickle down to the poor.Footnote 27 The responsibility of social welfare was assigned to the subnational governments which did not express much interest in distributional objectives.Footnote 28 The 5th five-year economic plan (1974–1979), for the first time, brought about the idea of a ‘Common Minimum Needs Program.’Footnote 29 Subsequently, newer anti-poverty schemes were introduced, yet expenditure on social safety nets received only a ‘residual’ budgetary allocation.Footnote 30
Inadequate attention to social welfare policies could be explained by an “absence of a real commitment among state elites, poor quality peripheral bureaucracy, but most of all, powerful vested interests” (Kohli 2012). Social institutions marked by multiple axes of identity-based divisions—subnational, religious, linguistic, caste, and class—provided sufficient distraction for the new democratic nation to generate a strong social contract. Elite interests—of farmers and businessmen—dominated policy ideas, and the citizen voices were suppressed by the social divisions within these groups. It was therefore in the interest of policy actors to harbor upon group identities and the form of politics it created to undermine citizen mobilization for ensuring a social minimum. The ‘social question,’ however, was addressed through identity-based political representation rather than citizenship ‘rights.’Footnote 31
The ideas of redistribution under the slogans of ‘gharibi hatao’ (eradicate poverty) emerged in the 1970s only when the Congress party—which held unopposed political power till then—began to face political pressures with a rising influence of identity-based political parties—language, region, and caste—at the subnational level. It led to a slew of anti-poverty policies—institutional support through expansion of agricultural credit and irrigation services—with the scope of addressing rural poverty, but the performance of these programs was unsatisfactory in reducing mass poverty.Footnote 32 It benefited primarily the interests of the landed agricultural class leaving the structure of poverty intact with families, religious, and caste affiliations continuing to be the source of social insurance during times of need.
The next two decades, 1980s and 1990s, brought about an ‘attitudinal shift’ in the government, away from state-led economic planning to greater reliance on private trade and global markets for economic growth (Rodrik and Subramanian 2004).Footnote 33 Policies which hindered private entrepreneurship—an array of license requirements, land and labor regulations, and other controls—were replaced with a greater ‘pro-business’ shift in the planning process. The idea of development through redistribution, as espoused during the 1970s, was quickly relegated to the backburner with priority being accorded to the “growth first” strategy (Kohli 2007). The strategy of economic liberalization put India on a path of unprecedented growth and structural transformation of the economy, yet achievements on human development outcomes continue to be lacking.Footnote 34
While economic deregulation did increase economic growth rates and led to a reduction in consumption-based poverty, it didn’t ‘trickle down’ to generate broad-based prosperity and therefore widened interpersonal and spatial inequality.Footnote 35 Commensurate improvements in human development outcomes such as undernutrition, health, or learning outcomes among children remain lacking. The growth process also did little to hasten the pernicious role of ‘sticky’ social institutions and cultural norms—unequal intra-household bargaining power, poor sanitation and hygiene practices, and low female labor force participation—while improvements in the quality of public infrastructure, which are essential for a broad-based reduction in poverty remained slow. These outcomes, however, should not be surprising if one believes that the attitudinal shift toward economic deregulation “was shaped largely by the economic problems of the government rather than by the economic priorities of the people or by long-term development objectives” (Nayyar 2017, p. 47).
The emergence of rights-based social protection demands in the 2000s proved to be a watershed moment which changed the policy ideas around redistribution. These ideas emerged from redistributive concerns arising out of a globalizing economy, urbanization, informalization of labor, and democratic strengthening. Government planning document also echoed its vision for ‘inclusive growth’ which “yields broad-based benefits and ensures equality of opportunity for all” (Government of India 2006, p. 2). Social welfare programs were now backed by the constitutional ‘rights’ created institutional guarantees to welfare transfers. Newer social welfare schemes were introduced while the poorly performing ones got a new lease of life, even in regions traditionally known for poor governance and corruption in public service delivery.Footnote 36 Civil society groups, the prime architects of this change, hailed it is a great triumph for the democratic process. Legitimacy to the concerns of poor and their political empowerment provided a proof that the “demands of the underprivileged majority can prevail over privileged interests” (Drèze 2010).
Economic growth in the subsequent years had allowed substantial financial resources to be spent on welfare, and greater political competition (especially at a subnational level) contributed to a more progressive social welfare policy. The ideas around scope, focus, and form of the social welfare programs however continue to be subservient to the perverse political interests and underdeveloped institutions. For example, despite its widely established nutritional benefits, political leadership in most states are hesitant to add eggs to the school meals or early life nutritional interventions, fearing its punitive electoral outcomes. The introduction of eggs is likely to offend the vegetarian lobby, leading to a clash of interests much to the detriment of improved development outcomes. While employment and food are considered citizen entitlements backed by constitutional legislations, right to affordable healthcare has not gathered the same support. Similarly, big farmer’s political interests inhibit innovations in farm income support programs and agricultural diversification, while public health insurance policies are often held ransom by the profit-driven interests of private healthcare providers.
At the implementation level, however, ideas matter less, but locally relevant social institutions, and state bureaucracy, become important. The efficacy of welfare systems depends upon the administrative structure responsible for delivery of benefits. Once the form, focus, and scope of policies are decided, fiscal allocations are made by the federal or subnational government which is funneled to villages and municipalities. Local bureaucrats and politicians work jointly to identify and distribute these benefits to deserving citizens. District and sub-district bureaucrats act as the state representatives while elected politicians are the people’s representatives in ensuring the deserving citizens get their welfare entitlement. An efficient, motivated, and adequately incentivized bureaucracy at the local level along with political empowerment of the citizens, therefore, is required for an egalitarian distribution of benefits to the citizens. While local state capacity and state institutions are becoming more participatory leading to greater benefits to the citizens, they continue to be underdeveloped, leading to an inefficient social welfare delivery system.
Underdeveloped Local Institutions
Persistent inefficiencies of the local institutions lead to an uneven translation of welfare ideas into human welfare, which has been the bane of Indian social policy, with the ignominy of being described as a flailing state—“a nation-state in which the head, the elite institutions at the national (and in some states) level remain sound and functional but this head is no longer reliably connected via nerves and sinews to its own limbs” (Pritchett 2009). Poor attendance of public health and teaching staff at workplace, frequent closure of shops which provide food to the poor and often malpractices by the shop owners, poor hygiene of school meals, lower increase educational learning, and lack of motivation among the lower level of public service providers reflect this problem.
Rent seeking behavior among local politician and bureaucrats is a typical characteristic of institutional failures of the state which lowers citizen’s trust in the public delivery system thereby acting as a deterrent to reforms such as better payment to the lower level staff and investment in local state capacity (The World Bank 2016). Local governance institutions (arms and limbs of the state) have not developed commensurately in India.Footnote 37 Trying to unpack the success as well the failures of the Indian state, Kapur (2020) notes that the Indian state succeeds mostly in episodic delivery of services or mission-mode projects such as holding free and fair elections, emergency relief, providing digital identity, building toilets, public schools, road infrastructure but when it comes to the everyday service delivery such as continued provision of social welfare programs, teacher, or health staff attendance, it lets its citizens down. The failure, he argues, emanates from the lack of local state capacity to deliver services, the nation’s struggles associated with a democratic transition amid widespread poverty and weak fiscal capacity, and the poor bargaining power of citizens through pervasive divisions along the lines of hierarchy and status in the society—religion, caste, class, and patriarchy—which promotes rent seeking and patronage, thereby debilitating local accountability.Footnote 38 While incentives such performance pay bonuses to local state actors have been put forwarded as solutions to ensure better accountability, and the use of technology to monitor performance, but it somehow hasn’t been able to change the culture of frontline bureaucracy.
Below, we discuss key features of the local state institutions, essential to understand the inefficiencies inherent in the last-mile delivery of the social welfare programs.
Local State Capacity and Implementation Deficits
Last-mile service delivery concerns—be it public goods or social safety net programs—have long been recognized as a ‘binding constraint’ to development.Footnote 39 Information asymmetry between the local state and higher authorities further creates avenues for rent seeking behavior by the local bureaucrats and politicians creating a ‘leaky’ public system which increases fiscal costs of the programs and reduces public support for welfare, in the long run.Footnote 40 Leakages in the PDS, lower take up of the health insurance, poor implementation of MGNREGS, overworked health and Anganwadi workers, and modestly funded primary health centers are some of the most glaring examples state failure. Overcoming this constraint requires an active local state, and its enhanced capacity to deliver.Footnote 41
Local state capacity, however, is one of the most tenuous aspects of governance as it most intimately connected to the variegated local institutions—archaic norms and beliefs, coercive power structure, conflicts, etc.—which largely emanates from information asymmetry on the part of the state around everyday lives of its citizens and how they negotiate with the local bureaucracy. Local state institutions—bureaucracy and political leadership—are often seen as insensitive to public concern and inefficient in their daily operations with complete disregard to formal and fair procedures.Footnote 42 Popular mass-media such as TV and movies have popularized this vision of frontline bureaucracy in India where citizen’s engagements with the local state are rarely rules-based, time consuming, and beset with discrimination.Footnote 43 Critics of the state intervention use these experiences to argue that the Indian state is bloated and inefficient. The reality, though, is mixed. There is plenty of evidence to show that local bureaucrats are often corrupt, inefficient, and apathetic to citizen concerns, but it is also important to note that performance is marred by lack of sufficient resources (human and financial) at their disposal to serve 1.3 billion residents of the nation.
Lower-level bureaucracy in India is considerably smaller compared to other countries. The share of local government employees in United States and China are five times to that of India, and the Indian state spends only 3% of its total expenditure on local government, while United States and China spend 27 and 51% of their total expenditure respectively (Kapur 2020). At the same time, despite a proliferation of administrative units and the rising managerial responsibilities of implementation and monitoring of various welfare schemes and infrastructural projects has not met with a commensurate increase in hiring posing a particularly acute challenge for the effectiveness of local state institutions and welfare delivery (Somanathan and Natarajan 2022). At the upper administrative echelons of the local state, district and sub-district level bureaucrats have increasingly become overburdened. A time-use survey of local officials in the country by Dasgupta and Kapur (2020) suggests that this ‘bureaucrat overload’ affects program implementation as well as the politician’s incentive to intervene. Resource constrained officials implement programs poorly because of the time constraints, and poor implementation further discourages devolution of funds to that administrative unit from higher political authorities, thereby significantly reducing state capacity and possibly welfare benefits to the deserving.
Technological innovations such as IT-enabled payment services, smartcards, and unique identification number in the form of Aadhaar have surely reduced the reliance of welfare beneficiaries on local state, thereby contributing to building state capacity.Footnote 44 Yet, lower staffing remains a lingering concern for improving long-term development outcomes. For example, while augmenting staff strength at the early childhood welfare scheme, ICDS, in a large-scale experiment by Ganimian, Muralidharan, and Walters (2021) shows a significant effect on improving learning and nutritional outcomes for children—representing two potentially large transformative impact of—ICDS workers continue to be poorly paid and overworked leading to low levels of motivation.Footnote 45
Expansion of state capacity, however, is more than hiring more people or creating a disciplined bureaucracy. Local state actors in India are notoriously known for extracting private benefits from the public resources they are responsible for. To stop such practices, greater state capacity also includes improvements in the prevalent ‘culture’ of bureaucratic practices which includes “the incentives, beliefs and expectations, or norms, shared among state personnel about how others are behaving” (Khemani 2019). Such practices are intrinsically connected to the nature of politics—both at local and federal level.
Elite Capture and Clientelism
Low state capacity and the ensuing implementational deficits in the delivery of social welfare are part of the larger malaise with the local institutions in India which is subservient to elite interests which work through personalistic ties. The entrenched structure of power in the local institutions is sustained through the information asymmetry inherent in the last-mile delivery systems and clientelistic local politics leads to ‘fragmented and unequal’ social welfare program implementation (Keefer and Khemani 2003).Footnote 46 Clientelistic practices—preferential treatment based upon caste, religion, and party affiliations—allow for politically targeted spending and strategic transfers.Footnote 47 Local elites—bureaucrats and elected representatives—possess discretionary power through the arbitrariness in beneficiary identification and the discretionary allocation of benefits, which perpetuates a culture of rent seeking and corruption.
Targeting errors—of inclusion and exclusion—are often a function of who the elites consider poor, and the process involves corruption and favoritism. A survey by Niehaus et al. (2013) found that welfare beneficiaries—as identified by the possession of a below poverty line (BPL) card—are often misclassified. They find that 70% of the ineligible households possessed BPL cards while 13% of the eligible households did not get one. Around 75% of the households reported paying a price above the statutory fee for the BPL card. Such forms of corruption emanate not only from the logistical challenges of identification, but also discriminatory partisan networks.Footnote 48 In schemes where participation is not targeted, local corruption and elite capture is of a different kind. The demand for work in the universal public works program, MGNREGS is mediated through local politicians who aggregate citizen demand and work with the state officials to get the program going. It is often reported that increase in MGNREGS wages are not passed on to the workers by the officials (Niehaus and Sukhtankar 2013b) and overreporting of number of days worked and underpayment of wages is a norm (Niehaus and Sukhtankar 2013a).Footnote 49 Similarly, there is substantial evidence which shows that identity-based networks facilitate access to subsidized food through PDS or nutritional assistance through ICDS.Footnote 50 Social welfare programs, therefore, often fail to reach the most marginalized and deserving.
Decentralization and Public Action
The pernicious effects of elite capture, and bureaucratic harassment, could potentially be overcome by empowerment of citizens and greater public action, through participatory governance which leads to a more deliberative citizen-state engagement. Administrative decentralization, therefore, emerged as an important instrument to improve state capacity for the implementation of social welfare programs. Decentralization which entails a formal devolution of power to local actors has two key components: civic participation and political accountability. Under a decentralized regime, citizens elect their local leaders and partake in local governance through highlighting the relevant developmental issues. Elected local politicians are further held accountable through the electoral processes. India’s 73rd and 74th Constitutional Amendment Acts, 1992 provided legal status to the panchayati raj institutions (PRIs) and urban local bodies (ULBs) in rural and urban areas respectively, for greater administrative decentralization and community involvement in planning and implementing various developmental schemes. Gram Panchayats, meaning village councils, acts as a cabinet council from a collection of villages which engages with the local population through commonly held gram sabhas (village council meetings).Footnote 51
The success of MGNREGS partly lies in its decentralized implementation. Being a demand driven social protection program, panchayats are responsible for drawing up plans to determine labor allocation and selection of development projects to employ workers under MGNREGS which allows for greater accountability toward the program beneficiaries. Similarly, decentralization of ICDS has improved community participation in the program, therefore its effectiveness in some of the poorest regions in the country.Footnote 52 Yet, in a country with high levels of inequality, and unequal status across groups, reduction in information asymmetry through participatory local governance does not necessarily guarantee greater accountability and citizen empowerment.Footnote 53
Local elites, despite greater public accountability, continue to hold political power, through their stranglehold over the moral economy of reciprocal exchanges within a rural society. The poor cannot bypass the local elites in claiming the state benefits.Footnote 54 Moreover, they continue to rely on traditional elites for other non-state services such as wage-based employment. As a result, the culture of subordination of the historical disadvantaged communities remains persistent thereby limiting the political freedom and voice which social welfare programs through decentralized system aim to relax.Footnote 55 Similarly, while periodic local elections may allow the democratic freedom to dislodge inefficient performers, administrative decentralization may also allow politicians to pursue patronage-based politics in a bid to enhance their political support base.Footnote 56 The benefits of decentralization, therefore, can only be realized when the entrenched power structures are weakened sufficiently for the disenfranchised section of the population to become an active participant in the local democratic process.Footnote 57 Until then, participatory governance, by itself, is less likely to have a transformative role in providing social welfare support to the most deserving in an efficient manner.
Varying Social Welfare Ideals at the Subnational Level
While a fledgling social contract, low state capacity, and weak local institutions undermine the effectiveness of social welfare programs at the national level, there are noticeable subnational exceptions. Some of the Indian state governments have exhibited greater commitment to social welfare ideas than others. They have relied upon a building a political coalition which has worked toward pushing citizen interests over private ones and reducing some of the last-mile implementational challenges through empowering local participatory institutions. As a result, they have been recently referred to as ‘laboratories’ of social welfare policy formulation in the country.Footnote 58 But not all states have been equally enthusiastic in pushing social welfare agenda, as ideas, interests, and institutions around social welfare vary significantly at the subnational level.
India’s parliamentary democracy has a federal character. It is imagined as a cooperative federalism under which the legislative domains of the central and central governments are clearly defined. While the central government has the power to legislate and enact new welfare programs, federal governments have the responsibility of implementing them. Federal system of parliamentary democracy is therefore an important institution of welfare delivery, where subnational governments, in addition to implementation of welfare programs, can also enact their own programs provided it falls under their purview of state or concurrent list such as agriculture, education, or health among others.Footnote 59 They can also add newer programs, innovate upon the form of welfare delivery, or increase its focus through an expanded set of beneficiaries, out of their own resources. Given the importance of subnational governments in program delivery and design, one observes remarkable variation in the delivery and effectiveness of social welfare programs across Indian states.
To highlight the variations in social welfare program implementation across Indian states, we present some of the social welfare programs performance indicators in Table 8.1. The South Indian states—with a higher per capita income and better human development indicators—clearly perform better. Among other regions, hilly states of Himachal Pradesh and Uttarakhand, along with the poorer states of Chhattisgarh and Odisha which have a tribal huge population are standout better performers.
South India’s Historical Exceptionalism
It is quite well-known that the South Indian states historically prioritized citizen welfare. They not only invested more in social welfare programs, but also ensured that the benefits extend to the most marginalized and maintained an efficient bureaucracy to keep last-mile implementational challenges to a minimum. Tamil Nadu and Kerala are the most prominent examples of it, where progressive social policies extended beyond welfare programs to investments in public welfare services such as education, health, and infrastructure, despite having a comparable level of poverty than the rest of India (Dreze and Sen 2002, 2013).Footnote 60 Social welfare reforms in other South Indian states of Andhra Pradesh and Karnataka followed the same lead. Progressive social policy in South Indian states have put them on a higher trajectory of economic and human development. Several reasons have been attributed to their exceptionalism, most important being a history of social movements and a united linguistic identity which allowed them to overcome deep-rooted societal divisions, reduce elite capture, and create more egalitarian local institutions, fostering greater public action.Footnote 61
Welfare-oriented social contract in Kerala goes back to the pre-independence period when the princely states of Travancore and Cochin made a strong commitment to reduce identity-based distinctions and empowered communities through public investments in literacy and public services. State politics in the post-independence era, continued the same trend, organizing around class-based movements, instead of identity, leading to greater social capital, which has contributed to Kerala’s empowered citizenry to demand greater welfare benefits.Footnote 62 In Tamil Nadu, on the other hand, mass-led non-Brahmin movement—protesting elite caste’s political capture—reduced traditional elite influence and championed the cause of social justice thereby facilitating greater political demand and supply of broad-based public services and social welfare for the citizens. The state championed public school meals and early life nutritional interventions much before they became national level welfare schemes.Footnote 63 The southern states had also initiated participatory governance through decentralization of program governance much earlier than some of the other states. The subnational social welfare ideas percolated down to create egalitarian local institutions through an efficient bureaucracy. At the same time, citizen empowerment through social justice movements created a stronger sense of collective action which reduced elite interests and ensured leaders remain accountable to their promise, thereby contributing to improved welfare delivery systems. What also worked in making the social welfare more effective in these states is that instead of a narrow focus on a specific section of the population, most of the schemes are universal in nature, and often free.
Historical trends are persistent. Southern states, despite a significant reduction in poverty, lay a greater emphasis on the ideals of social welfare. It is essential to their politics. Andhra Pradesh, another South Indian state, has been one of the best performers in implementing MGNREGS, and its success comes from a strong political commitment from the state government. The state was also one of the first one in pioneering social audits of the program by the local citizens and bringing in electronic payments. Social audits have now been further extended to other welfare programs.Footnote 64 Similarly, direct cash transfers to farmers were first introduced by the newly formed state of Telangana (carved out of Andhra Pradesh), which was subsequently launched as a national level scheme, PM-Kisan.
Emerging Political Populism in North India?
The nature of politics in South India has been key to its successful social welfare policies. A broader political coalition which supported the ideas of citizen welfare and created efficient institutions in pursuing poverty alleviation policies, as imagined in the South, were lacking in other states. Kohli (2012), observes that the “southern states as a whole share some of these political traits of India’s “social democratic” states—a broad power base and competent bureaucracies—but not others—well organized ruling parties and an activist citizenry—creating within them some capacity for poverty alleviation. Hindi- heartland states pretty well lack most of these traits, creating a political landscape in which repeated redistributive failures have by now become a norm.” Yet, despite the general pessimism associated with poor social development in North Indian states, incremental positive changes are now visible (Vivek 2015).
Himachal Pradesh and Uttarakhand along with the poorer states of Chhattisgarh and Odisha are at the forefront of this positive change. Himachal Pradesh, like Kerala, has taken a more expansive and deliberative model of social development in the post-independence period, where bureaucratic disciple is strictly adhered to, and collective action (especially around forest and water management) inspires greater public action holding local politicians accountable.Footnote 65 The state had undertaken a massive universal education drive in the 1970s and ranks high on most human development indicator currently. Uttarakhand, carved out of Uttar Pradesh in 1999, is another hilly state in the Himalayas, which has taken a similar model as Himachal Pradesh.
The turnaround in the performance of social welfare programs in the relatively poorer states of Chhattisgarh and Odisha is however the most striking.Footnote 66 Even before the National Food Security Act, 2013 was implemented in the Indian parliament, Chhattisgarh had enacted its own Food Security Act following up on a massive reform of PDS in the preceding decade. Today, it has the most well-functioning, near-universal PDS which was unimaginable two decades ago. In Odisha, where starvation deaths used to be a common occurrence in the 1990s, improved performance of food and early-child nutrition initiatives, has made it a ‘success story’ of social welfare program implementation and impact, despite lower state capacity.Footnote 67
A convincing explanation of why some states have seen such a turnaround while others continue to flounder could possibly be a book (or a series of them) in itself. A myriad set of ideas, interests, and institutions have forged the subnational social contracts, and the process is still a work in progress. Among the many possible explanations, what stands out is the role of politics and commitment of state leaders.Footnote 68 Noted economist and one of the most influential chroniclers of social welfare reforms in India, Jean Drèze, reckons that social welfare—ideas of welfare and its effective implementation—is a political problem. Referring to the improvement of PDS in Chhattisgarh, he saysFootnote 69:
Ultimately, however, it is political will that seems to matter most. Somehow, the PDS became a political priority in Chhattisgarh and a decision was made to turn it around, instead of siding with the corrupt dealers who were milking the system. When political bosses firmly direct the bureaucracy to fix a dysfunctional system, things begin to change.
The fact that government functionaries were under enormous pressure to make the PDS work was evident in Lakhanpur. For instance, monitoring grain movements had become one of the top priorities of the patwaris (landrecord officers) and tehsildars (revenue officers). The tehsildar mentioned that the PDS was the first agenda item whenever meetings were held at the district level. The political pressure was also manifest in their willingness to stand up to vested interests, e.g. by arresting corrupt middlemen and sending them to jail if need be.
It would be naïve to think that the revival of the PDS in Chhattisgarh reflects the kindheartedness of the state government, especially in the light of its contempt for people’s rights in other contexts. It was a political calculation, nothing more.
Historically, the pursuits of social welfare were a political plank in Southern India, while the North Indian politicians appealed to the narrow politics of identity—mostly caste and religion—appeals to sustain their politics.Footnote 70 Since the 1990s, social welfare policies have become a part of political calculations in North India as well as the role of regional parties in central politics has risen.Footnote 71 Multi-party fragmentation at the center necessitated a new form of electoral engineering which allowed the subnational governments to design and implement their own distinctive welfare policy agendas (Tillin 2022). Greater influence of subnational politics on the national politics has allowed the state political bosses, the chief ministers, to be more assertive in exercising their discretionary powers, and stake claims for the success of welfare programs, thereby increasing their popularity to seek ‘regime legitimacy’ (Manor 2015, 2016).Footnote 72
The institution of federalism has therefore been key in shaping the ideas of welfare at the subnational level. State governments have not only been actively participating as key actors in the policy design process, but also influencing each other through learning from one another’s experience. In that regard, North still has a lot to learn from the South. There are two major aspects to it—sustained commitment to the ideals of social justice, and faster economic growth. It is important to note that the success of Southern states in social policy implementation came from a longue durée policy commitment to redistributive ideas which empowered citizens to demand their citizen entitlements and hold state actors accountable for service delivery. These services went beyond social protection programs to public investments in education, health, and other infrastructure, which created a citizen-oriented social contract.Footnote 73 The ability of the state to supply welfare support, on the other hand, emerged from their fiscal ability to generate sustained economic growth. A large share of the North Indian states lack on both these fronts. The politics around social welfare in the North Indian states has emerged as another strategy of political populism, or ‘political calculations,’ as Jean Drèze remarks in the above quotation, to ensure electoral success as the redistributive ideas lack a commitment to social justice and citizen empowerment. This is also reflected in the continued lack of enthusiasm in improving the quality of public services. Similarly, stagnant economic growth in most of the states implies a diminished agency to allocate more funds to welfare programs to improve implementational capacity.
Threats to Subnational Welfare Regimes
Federal relationship is determined by partisan dynamics and the nature of political leadership at the central level, given they control the resources.Footnote 74 Subnational welfare regimes thrived in India because they got greater resources from the center, and the state leadership had autonomy to improve implementation. As the power of one central political party declined since the beginning of the 1990s, and consequently, the influence of country’s Prime Minister (PM) watered down, subnational leaders began to assert their autonomy. The election of 2014 and the massive victory of BJP in the central elections with PM Modi at its helm, however, marked a break with the central party and PM again becoming important.Footnote 75
Concentration of power at the center has created a tussle between the center and state governments to appropriate the credits of social welfare programs. Many of the programs now have a prefix PM (for “Prime Minister”) attached to the programs to signify political leader’s benevolence. Centralized transfer of welfare benefits—bypassing the subnational government, leveraging upon the technology to make direct transfers—has further encroached upon the state government’s constitutional responsibility and fiscal space causing rift between the central and state governments (Aiyar 2019).Footnote 76 Since 2014, a series of flagship schemes have been further launched by the central government, which provides private transfers (such as housing, toilets, cooking gas, and cash) in addition to the social welfare programs to “redefine and to repurpose the welfare state from a right-based and universalistic logic to a logic of rationing and targeting welfare to those who “deserve” it” (Heller 2021, p. 117). The new semantics of pro-poor politics, arising out of electoral necessities, tries to shift social protection paradigm in the country from state support as a citizenship right to personalized gestures of generosity, rather than social upliftment and justice. Such personal politics which centralizes political power in one strong national level leader has the risk of undermining public action through democratic accountability, deliberative local institutions, and citizen participation, essential to sustain a social democracy (Sircar 2020). It also skirts the issue of transforming the state bureaucracy and local institutions, which are still central in identifying the poor, delivering the benefits, and ensuring political accountability (Aiyar and Walton 2015).
Conclusion
Development resilience requires adequate protection against anticipated and unanticipated risks, while developing human capabilities to adapt to such risks over time. Indian state has taken great strides in providing this through an expansion of the coverage of social welfare programs through enacting rights-based legislations, introducing newer social safety net programs, and improving welfare delivery systems, but there is still a long road toward “having found its feet as far as social security programs are concerned” (Drèze and Khera 2017). Such anxieties largely emerge from the politicized nature of the ideational process of social welfare programs determined by perverse interests. Redistributive ideas motivated by short-term electoral concerns in countries with underdeveloped institutions often makes the social welfare program a handmaiden of political interests with detrimental implications for a transformational impact on poverty and increasing development resilience. The success of some of the state governments in creating a stronger social contract regarding welfare however provides some respite to these apprehensions which now seems to be under threat with the rise of new forms of welfarism which does not pay attention to encouraging collective mobilization, civic action, and effective state institutions.
Notes
- 1.
These are the latest figures, but unfortunately more than a decade old based upon the computations by Dreze and Khera (2015) using the National Sample Survey Organization (NSSO), 2011–2012. While we strongly believe that the leakages have come down since then, but there is no data to back this claim.
- 2.
A note prepared by the Peoples’ Action for Employment Guarantee estimates that 15.5 million workers did not get work under MGNREGS despite asking for it in 2020. Majority of this unmet demand for work was concentrated in the poorer states: Uttar Pradesh (27%), Madhya Pradesh (22%) and Bihar (20%). See https://www.im4change.org/upload/files/PAEG%20press%20conference_10%20September%202020.pdf. Accessed November 20, 2022. Also refer to Narayanan et al. (2020) for a discussion. Analyzing over 9 million wage payments under MGNREGS in 2016–2017, Narayanan et al. (2019) show that only 21% of the payments were made within the stipulated duration of 15 days from work.
- 3.
https://gcnf.org/wp-content/uploads/2021/05/State-Survey-of-School-Meal-Programs-in-India-Report-with-Annexes.pdf Time-use survey of Anganwadi workers suggests that a substantial amount of their time is spent on administrative tasks which compromises upon their time on providing direct care, while they are unpaid at the same time (Jain et al. 2020; Razavi and Staab 2010).
- 4.
See Parisi et al. (2022).
- 5.
- 6.
See Gupta (2012).
- 7.
Mehta and Walton (2014) provide a rich description of the politics of development and change in India using the concepts of ideas, institutions, and interests. Varshney (1989), in his seminal work, also appeals to the importance of these concepts for understanding Indian agricultural policymaking process and the rural-urban divide. Similarly, Mukherji (2014) uses changes in ideas, institutions, and interests to explain India’s embrace of globalization policies and institutional change toward market-based model of development in the 1990s. Recently, Baloch (2021) has engaged with the role of ideas—of nationhood, and socio-economic deprivation—on democratic practice and corruption in contemporary India.
- 8.
In their recent book (Acemoglu and Robinson 2020) demonstrate how a strong state and society—creating a ‘corridor’ of competition and collaboration where potentially despotic action is checked by the society, while state’s commitment toward basic societal needs tempers social upheavals—is essential for human flourishing.
- 9.
The analytical lens of social contract allows one to study the development process of a nation through the changing nature of state-society relationship over time. The strength of social contract is increasingly gaining attention as an important explanation of the persistence of underdevelopment—with deep-rooted inequalities, poor quality of public services, lack of or weak institutions, and resistance to reforms—across the developing world (Cloutier et al. 2021). See Hickey (2011) and Hickey and King (2016) for the role of social contracts in the politics of social protection.
- 10.
Weak social contracts in countries with imperfect markets and poor state capacity create mutually reinforcing conditions of high inequality in income and opportunity, disempowered citizens, and lower demands for redistribution. See Bénabou (2000) for a theoretical exposition.
- 11.
See Gough (2008) for more details.
- 12.
Ideas around universal values—equality, solidarity, social justice, or security—have been the hallmark of welfare policy in the welfare states in advanced nations. To understand the role of ideational process and its connectedness with political institutions and policy legacies, refer to Béland (2005). Also see Leisering (2021) for an ideational approach to social protection policies in Brazil, India, China, and South Africa, four of the major countries in Global South which have embarked on expanding social safety nets since the 1990s.
- 13.
Ethiopia’s Productive Safety Net Program (PSNP) in mid-2000s is an example of the former, while expansion of welfare programs in Korea and Taiwan represents the latter case. Sustainable Development Goals (SDGs) 1.3 and 3.8 further mandate country-specific minimum level of social protection floor and universal health coverage respectively which affects domestic social welfare policies. In the wake of COVID-19, UN General Assembly at the 47th Human Rights Council Meeting decided upon a global fund for social protection to allow low-income countries to guarantee a minimum standard of living through social assistance programs.
- 14.
- 15.
For example, property rights, efficient contract enforcement, or credit institutions promote exchange, bureaucratic corruption or institutional hierarchy is an impediment to fair returns to this exchange. The latter inhibits both the efficiency and equity in an economic system. In order to understand which institutions may matter and which may not, see Bardhan (2005).
- 16.
The institution of race and persistent racial prejudice is referred to as an important impediment to progressive social welfare policies in the United States compared to countries at a similar level of economic development in the Europe. Racial minorities in the USA are highly overrepresented among those eligible for welfare benefits. Political rhetoric positions the colored minorities, mainly the Black population, as lazy recipients of welfare suppresses redistribution (Alesina et al. 2001). Within the USA, welfare expansion was resisted for a long time. Agricultural interests of the Southern region discouraged civil rights movement because it was likely to hinder the availability of cheap labor. This resistance lasted until agricultural technologies such as mechanization in the late 1950s and early 1960s reduced the demand for labor (Alston and Ferrie 1999). Similarly, old age pensions in South Africa were meant only for the white citizens until the apartheid era came to an end.
- 17.
In most developing countries, corruption or discrimination is rampant and such an intrinsic part of social life that lack of bureaucratic accountability and bribery is considered a ‘norm’ (Basu 2011, 2018). These norms are legitimized or rather enforced through lack of political voice of the disadvantaged. In the case of local public services, social networks among the elites (Cruz et al. 2020) and culture of coercion might impinge upon public action (Rao and Walton 2004). Local collective action, however, which overcomes the distinctions between people, and creates solidarity groups can overcome some of these challenges (Ostrom 1990). Improvements in the local governance in India has been cited as one of the reasons for improved public services, however, its unevenness is explained by the supra state, i.e. the subnational ideas of democratic empowerment (Rao and Sanyal 2019).
- 18.
Political interests affect the design of economic policies (Persson and Tabellini 2002). For example, agricultural price support policies across the globe have created newer political interests and community mobilization around sustaining such policies as it provides disproportionately high benefits to certain groups of the society at the expense of others and larger developmental goals. Refer to Pierson (1993, 1996) for a comprehensive discussion on the politics of welfare.
- 19.
The nature of federal system its interaction with central and local institutions are instrumental in influencing social policies. Pierson (1995) provide its theoretical underpinnings with a comparative study of social policies in United States and Canada.
- 20.
See Drèze and Sen (1991) for a discussion on failure of public service delivery in India.
- 21.
The status-quo in policy stance emerges despite its inefficiency emerges from the political uncertainty about the consequences of reform. Ex-ante, who stands to gain or lose from the change is not determined. Gradualism, through partial reforms, which slowly ease out these political constraints are therefore more politically sustainable than a ‘big bang’ policy change. See Rodrik (1996) for more discussion on the challenges of policy reform.
- 22.
For instance, the dominant ideas around social welfare policies during the early twentieth century was economic recovery from the Great Depression and recovery from the World Wars. In the 1970s and 1980s however, the political efforts to dismantle those benefits were motivated by the ideas that white working-class citizens are paying for the benefits received by the predominantly black welfare recipients. Focusing on the low-income countries, Lavers and Hickey (2016) argue that the ideas around social protection need to be studied within the broader real of domestic and transnational political economy changes as democratic deepening and globalization have contributed significantly to expansion of welfare programs in the Global South.
- 23.
Lavers and Hickey (2016) argue that a social protection in developing countries has primarily become a political tool to maintain stability and legitimacy of political rule rather than as a lever of advancing development. Success or failure of social protection in developing countries therefore must be understood as a corollary of vested interests of the policy actors. Studying the introduction of social welfare programs in sub-Saharan Africa, Lavers and Hickey (2021) highlight the role of transnational influences such as global policy coalitions in the introduction and adoption of social protection ideas, while political interests arising from the presence of democratic institutions such as competitive elections further entrench or institutionalize the social transfers programs. They argue that in countries where electoral competition is low, elite’s perception of vulnerability and impending distributional crisis which could pose a potential threat to the ‘legitimacy of rule’ aids expansion of social welfare programs.
- 24.
Rodrik (2014) argues that the political economy models often overemphasize vested political interests as a cause of underdevelopment leading to pessimistic interpretation of reforms. According to him, ideas act a catalyst for policy and institutional change as interests are also nothing but pre-conceived ideas of future benefits. Institutional transformations such as prohibition of slavery, universal suffrage, or democratic institutions are after all ideas of equality and hope for a better world. Using a political economy model of ideas and policy change, Mukand and Rodrik (2018) reckon that “in the very short run, it is all about interests. In the long run, it is all ideas.”
- 25.
See Grosh et al. (2008) for the desirable attributes of a successful social welfare program.
- 26.
Institutions influence, and are influenced, by such contestations for welfare delivery. Mukand and Rodrik (2005) argue that while economic ideas are transferable, they are not institution-free. Institutions, germane to the success of welfare programs, are however distinct across contexts. Economic concepts of incentives, competition, budget constraints, fiscal sustainability, and property rights which are central to the reform process do not map directly into institutional solutions. As a result, reforms successful in one context may be a poor policy option in others. They provide examples of two-track reform which may have worked well in China but not in Soviet Union. Similarly, import substitution may lead to competitive industrial structure in Brazil, but not in Argentina. Understanding the success of social welfare policies—in terms of focus, form, and scope—therefore requires a rigorous engagement with the nature of ideas and institutions which allowed the introduction and functioning of particular social welfare programs along with the political interests it generates.
- 27.
Economic planning in the early years had committed itself to the ideals of ‘socialist’ path of economic development—state driven industrialization—where agriculture was meant to be a source of inputs for manufacturing sector. The socialist approach, however, remained limited to matters of economy as institutional agrarian reforms—such as redistribution of land, devolving power to local bodies, or establishment of cooperatives—was resisted by local landed political elites. See Varshney (1998) and Mehta and Walton (2014) for a detailed discussion on the political ideas, and competing interests on issues related to the development process and subnational responsibilities in India’s planning process.
- 28.
Subnational politics was dominated by elite interests—landed farmers—who resisted land reforms thereby leaving the largest share of the people shorn of basic physical assets essential to break out of the poverty trap. The farmer elites, in subsequent years, got further emboldened with gains from the ‘grow more food’ agricultural policies to fight famines. The idea of poverty reduction was synonymous with starvation, and famines in those years, and the government therefore emphasized agriculture. See Chapters 2–5 for more details.
- 29.
It is important to note that Indian Constitution aims to achieve economic democracy along with political democracy. The ideals of economic welfare are enshrined in its Directive Principles of State Policy (Article 38) but are not legally binding. Article 38 of the Indian Constitution states, “i) The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life. ii) The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.”
- 30.
See Guhan (1995) for a discussion.
- 31.
India’s constitution outlawed caste-based untouchability—a defining feature of the caste system—and provided for affirmative action policies in politics, education, and employment to the most marginalized of the groups, scheduled castes (Dalits) and scheduled tribes (Adivasis) subsequently. See Pellissery (2021) for a discussion on the stifled ‘social question’ in India.
- 32.
See Chapter 4 for a more detailed discussion.
- 33.
Economic planning in the early years had committed itself to the ideals of ‘socialist’ path of economic development—state driven industrialization—where agriculture was meant to be a source of inputs for manufacturing sector. The socialist approach, however, remained limited to matters of economy as institutional agrarian reforms—such as redistribution of land, devolving power to local bodies, or establishment of cooperatives—was resisted by local landed political elites. Varshney (1998) comprehensively portrays the clash of ideals and interests in the early years of Indian policymaking.
- 34.
What distinguishes India from these other countries which went through structural transformation in the postwar era is the lack of long-term ideas around social policy. The structural transformation process in the East Asian countries was driven by a rising share of both manufacturing and the service sector in the total output and investment in social welfare as part of their structural transformation. Service-sector growth of the Indian economy created a dual labor market—earning epithets like India of light and darkness, the dollar-rupee economy or islands of California with sub-Saharan Africa—where high-skilled and educated urban work force enjoyed the fruits of employment provided social security while the rest of labor force was devoid of any support in times of adversity. As a result, only less than 10% of India’s workforce has the provision of employment based social security currently. See more details in Chapters 3 and 4.
- 35.
Any serious student of poverty debate would highlight the limitations of money-metric measure of consumption-based poverty lines. Kotwal et al. (2014) therefore contend that if one considers poverty at twice the government identified poverty line, poverty levels in India remain unchanged between 1983 and 2004 at a staggering 80% of people falling under poverty. Refer to Chapters 3 and 4 for a comprehensive discussion.
- 36.
For a systematic review of the policymaking process, key actors which influenced it and their interests behind the introduction and reforms of anti-poverty programs between 2004 and 2014, refer to Chiriyankandath et al. (2019).
- 37.
Indian public administration has 5 tiers—nation, subnational states, districts, sub-districts, and village/municipality. It has been argued that the subnational elites hoarded power and did not allow the third tier of local government—such as the village councils (panchayats) and the municipal corporations—to develop. See Evans and Heller (2019) for a comparative review of state directed development process across countries in Asia and India’s unique challenge.
- 38.
The term ‘state capacity’ signifies the ability of the government to reach its citizens, hear their grievances, enumerate them, collect taxes, create physical infrastructure, ensure law and order, and provide basic citizenship rights.
- 39.
Providing welfare services to the poor, in the remotest part of the world, has been identified as a major challenge to development policy. See World Bank (2003).
- 40.
For the effect of corruption on social spending and redistribution policy of the state, see Olken (2006).
- 41.
- 42.
Max Weber, the founder of the study of administration, defined bureaucracy as an ‘organizational structure that is characterized by many rules, standardized processes, procedures and requirements, number of desks, the meticulous division of labor and responsibility, clear hierarchies and professional, almost impersonal interactions between employees’ (Weber 2009). Indian bureaucracy is far from the Weberian one because the various agencies responsible for program delivery and the local power structures influencing fairness in the system. Enrollment in social welfare programs entail a prolonged and complicated application process. Often the information around eligibility is unclear, and there are transaction costs to enroll in the program, which encourages rampant corruption and rent seeking. For example. getting local politicians and bureaucrats to vet and approve application form and several supporting documents—an identity proof, proof of address and marital status (for maternity transfers), bank account information, etc.—itself to begin enrollment in welfare programs is a cumbersome process which acts as a greater discouragement to enroll among those with lower levels of literacy (often women). In an experimental study of widow pensions, Gupta (2017) shows that lower take-up of the program among many women can attributed to bureaucratic frictions which hinders successful enrollment.
- 43.
Before the advent of cable television, comedian Jaspal Bhatti’s show on national television, Ultra Pulta was principally centered around the theme of daily corruption. Almost a decade later, each episode of actor Pankaj Kapoor’s show, Office Office, portrayed the mundane struggles of a common man muddling his way through wily local officials trying to get basic services like driving license, passport, or death certificate made. Bhrashtachaar (corruption), or sifarish (leaning on a powerful person to get something done) are common phrases used to represent local state in Northern India. These issues are as salient in accessing social welfare programs, beginning from proving eligibility status, getting the required identity documents approved, maintaining the documentation, and availing the benefits. See Gupta (2012) and Corbridge et al. (2005) for an inquiry into citizen-state interaction and corruption in rural India.
- 44.
See Muralidharan et al. (2016) for the benefits of smartcard based payment in MGNREGS.
- 45.
For more details, see Chapter 6.
- 46.
Surmounting elite capture at the local level is difficult of the information possessed by the last-mile actors who are responsible to identifying the poor and delivering benefits. Higher level actors, therefore, are bound to work within a limited information setting. For an anthropological account of the Indian state—from higher level bureaucrats to local ones—in implementation of MGNREGS in Andhra Pradesh, refer to Veeraraghavan (2021).
- 47.
Caste preferences are pervasive when it comes to the delivery of public goods in India and its persistent across the administrative system despite political empowerment of the lower castes. Studying more than 100,00 local representatives in the state of Bihar, Sharan and Kumar (2021) finds that political representatives in the lower administrative geography are discriminated against from higher caste political officials in the higher geography. Further, using data from all villages in India, Bharathi et al. (2018) show that villages with a larger share of lower caste people have lower incidence of state-provided public goods, which is largely explained by discrimination from top-down in the administration. See Bardhan and Mookherjee (2000) for a theoretical debate on elite capture and rural governance in India.
- 48.
Using a nationally representative survey, Panda (2015) shows that local political connections influence the possession of below poverty line (BPL) card which essential to access most pro-poor targeted programs. Similarly, Asri (2019) finds that large share of the poor who do not have the right political connections are not able to get a BPL card, and hence are deprived of their old age pension. The deprived ones are also disproportionately poorer.
- 49.
Using sub-district level flow of MGNREGS funds into the state of Rajasthan, Gupta and Mukhopadhyay (2016) show that the Congress party, which brought in the right-to-work legislation allocated greater amount of funds were to regions where it had a lower seat share, despite the fact that MGNREGS is a demand-based and not supply-side scheme. Similarly, in a survey from West Bengal, Das (2015) finds that workers who support the local ruling political party, are not only more likely to participate in MGNREGS, but also report greater number of days of work and earnings from participation in the program. Survey evidence from Andhra Pradesh strengthens this argument by showing that politically active households benefited more from MGNREGS, and the program was used by the incumbent party to expand its base to attract newer voters (Chau et al. 2021). However, improved accountability measures and transparency mechanisms through social audits have worked to reduce partisan behavior in the state of Andhra Pradesh. See Maiorano et al. (2018) and Sheahan et al. (2018), for example.
- 50.
Using a survey data from Uttar Pradesh villages, Nagavarapu and Sekhri (2016) show that the marginalized caste groups are more likely to buy grains when the PDS shop owner belongs to their own caste. In Bihar, another state with high rates of poverty and poor implementation of social welfare programs, the distribution of food coupons was done along the lines of partisan affiliations, depriving many of the poor of their entitlements, while allowing the undeserving non-poor to benefit from the program (Choithani and Pritchard 2015). For caste-based discrimination in access to ICDS, refer to Mamgain and Dilip Diwakar (2012) and Thorat and Sadana (2009).
- 51.
Every gram panchayat serves office for a term of five years and elections are conducted after every term. There is a provision of affirmative action with one-third of the seats, on a rotational basis, reserved for women, and another stipulated share of the historically marginalized groups—scheduled castes (SCs) and scheduled tribes (STs). For more details, refer to Nagarajan et al. (2014).
- 52.
The devolution of powers to Panchayati Raj in Chhattisgarh has fostered a participatory service delivery system across a range of programs where citizens engage in participatory governance (Chanchani 2022). Similar findings hold true for the state of Odisha. See https://globalnutritionreport.org/resources/case-studies-and-briefings/decentralising-accountability-nutrition-odisha/. Accessed October 18, 2022.
- 53.
For a discussion on the limited potential of decentralization in contexts with low state capacity and elite capture, see Bardhan (2002).
- 54.
Moral economy refers to the ideas of economic justice and the mutual obligations in a particular social arrangements (Scott 1977). In rural India, public action to access welfare benefits is determined by the interactions with local state—of oneself and the community—and prevailing social and spatial determinants of the flow of information and ideas (Kruks-Wisner 2018). Krishna (2002) has famously highlighted the importance of ‘active’ social capital—differentially distributed across citizens—in accessing public services in rural India.
- 55.
- 56.
Local elections and political representatives, in that case, become a source of principal agent for the central leaders to gather information on their potential voters which allows them to focus on groups and design patronage strategies. Refer to Bohlken (2016) for a detailed argument.
- 57.
- 58.
We have highlighted these innovations across multiple welfare programs in earlier chapter. Also see Deshpande et al. (2017) for political dimension of this change.
- 59.
- 60.
- 61.
A strong subnational identity allowed some states to accommodate identity-based divisions, creating a syncretic culture and stronger political mobilization for citizen welfare. See Singh (2106) for a detailed exposition.
- 62.
- 63.
The idea of school meals in India was first introduced by Tamil Nadu Chief Minister, K. Kamaraj in 1956. Under the program, food prepared in central kitchens was delivered on bicycles to various public schools. In 1982, the program was scaled up in the state by M G Ramachandran (popularly known as MGR). Similarly, Tamil Nadu Integrated Nutrition Program (TINP) proved to be an important source of learning for the ICDS. See Chapter 5 for more details on how state leaders championed the cause of food assistance programs in South India in the 1980s, and more recently in some of the North Indian states.
- 64.
Andhra Pradesh also brought in an innovation where MGNREGS work was to be decided by contracted agents, instead of the local village council. These agents had a set target to provide a minimum level of work every year or else they would be laid off (Maiorano 2014).
- 65.
- 66.
- 67.
A comparion of Jharkhand and Chhattisgarh—two newly formed mineral-rich states, with a predominant tribal population—suggests that even at low levels of state capacity, performance of social welfare programs could be improved provided there is sufficient political commitment (Chhotray et al. 2020).
- 68.
For a comparative study of state-level politics in shaping social policies in recent times, see Tillin et al. (2015). Chiriyankandath et al. (2019) also describe the unearths the constellation of interests that shaped their legislation, and the key roles played by central, state and local governments, senior politicians, bureaucrats, civil activists, courts and the private sector in influencing their agenda. Focusing on political dynamics and the crucial issue of implementation, the authors address how concerns such as coalitions of interest, resource availability, and local and state administrative capacity shaped what was thought possible at the implementation stage.
- 69.
Drèze (2019, pp. 186–187).
- 70.
Deshpande et al. (2017) attribute the importance of subnational welfare politics to three factors—political legacy of welfare, broad-based social coalitions which cuts across social identity and class, the political competition arising out of it, and the extent of political leaders’ commitment to welfare delivery.
- 71.
With the decline of Congress party in the 1990s, regional parties became increasingly important in central politics, which provided state governments to have a greater maneuvering power in the policy space (Kennedy et al. 2013; Manor 2015). Some of these regional parties were emerged from a ‘politics of dignity’ representing the interests of socio-economically marginalized caste groups, and thereby demanding affirmative actions policies and targeted redistribution (Chhibber and Nooruddin 2004; Thachil and Teitelbaum 2015). Aneja and Ritadhi (2022) show that this mobilization of lower caste groups led to an improvement in the performance of food transfer program, PDS.
- 72.
Chief ministers of state governments, recognizing their ability to claim electoral credit in the eyes of voters, committed themselves to welfare policies, even when the programs were designed and financed by the central governments (Tillin and Pereira 2017). Some of them also introduced their own programs or added to the list of eligible beneficiaries.
- 73.
When social welfare policies become an instrument of political strategy through the provision of targeted benefits in exchange for political support, there is a risk of underinvestment in public services which are likely to benefit in long-term development outcomes such as the quality of schools, health infrastructure, water, etc. at the expense of temporary relief which social welfare programs provide (Khemani 2015). Southern states of India, however, defied this argument with an expansion of social welfare programs along with greater public investments in education, health, and infrastructure.
- 74.
See Aiyar and Kapur (2019).
- 75.
CMs, however, when unaligned with the ruling party, have continued to express their autonomy over social welfare schemes, which have again influenced central policies. Income transfers to farmers, PM-Kisan, being one of the examples.
- 76.
Recent research suggests that voters are more likely to attribute the receipt of social welfare to the central government despite state governments overseeing welfare program delivery (Deshpande et al. 2019).
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Rahman, A., Pingali, P. (2024). Incommensurate Welfare Gains: The Role of Ideas, Institutions, and Interests. In: The Future of India's Social Safety Nets. Palgrave Studies in Agricultural Economics and Food Policy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-50747-2_8
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