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Is a Decentralized Right-to-Work Policy Feasible?

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  • 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.

Suggested Citation

  • Martin Ravallion, 2019. "Is a Decentralized Right-to-Work Policy Feasible?," NBER Working Papers 25687, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25687
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    References listed on IDEAS

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    1. Martin Ravallion & Gaurav Datt, 1995. "Is Targeting Through a Work Requirement Efficient? Some Evidence for Rural India," Monash Economics Working Papers archive-41, Monash University, Department of Economics.
    2. Jha, Raghbendra & Gaiha, Raghav & Pandey, Manoj K., 2012. "Net transfer benefits under India's rural employment guarantee scheme," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 296-311.
    3. Alik-Lagrange, Arthur & Ravallion, Martin, 2018. "Workfare versus transfers in rural India," World Development, Elsevier, vol. 112(C), pages 244-258.
    4. Ravallion, Martin & van de Walle, Dominique & Dutta, Puja & Murgai, Rinku, 2015. "Empowering poor people through public information? Lessons from a movie in rural India," Journal of Public Economics, Elsevier, vol. 132(C), pages 13-22.
    5. Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-261, March.
    6. Ravallion, Martin & Datt, Gaurav & Chaudhuri, Shubham, 1993. "Does Maharashtra's Employment Guarantee Scheme Guarantee Employment? Effects of the 1988 Wage Increase," Economic Development and Cultural Change, University of Chicago Press, vol. 41(2), pages 251-275, January.
    7. Abhijit Banerjee & Esther Duflo & Clément Imbert & Santhosh Mathew & Rohini Pande, 2020. "E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India," American Economic Journal: Applied Economics, American Economic Association, vol. 12(4), pages 39-72, October.
    8. Khera, Reetika (ed.), 2011. "The Battle for Employment Guarantee," OUP Catalogue, Oxford University Press, number 9780198070627.
    9. Ravi, Shamika & Engler, Monika, 2015. "Workfare as an Effective Way to Fight Poverty: The Case of India’s NREGS," World Development, Elsevier, vol. 67(C), pages 57-71.
    10. World Bank, 2011. "Poverty and Social Exclusion in India," World Bank Publications - Books, The World Bank Group, number 2289.
    11. Rinku Murgai & Martin Ravallion & Dominique van de Walle, 2016. "Is Workfare Cost-effective against Poverty in a Poor Labor-Surplus Economy?," The World Bank Economic Review, World Bank, vol. 30(3), pages 413-445.
    12. Martin Ravallion & Emanuela Galasso & Teodoro Lazo & Ernesto Philipp, 2005. "What Can Ex-Participants Reveal about a Program’s Impact?," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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