Despite Growth, India Can Provide Services to its Poor

Despite Growth, India CAN provide services to Poor

“ Blind Man” “ I am Blind… Please Help Me… ”

Source: Census of India Annexure III, GOI 2001 “ Poverty has induced unwanted regional imbalance”

Why services are failing for poor people?

Public spending usually benefits the rich,

not the poor.

Money fails to reach frontline service providers.

Service quality is low for poor people

But services can work for poor…

By empowering poor people to

Monitor and discipline service providers

Raise their voice in policymaking

By strengthening incentives for service providers to serve the poor

Propositions given by various Whitepapers More Land Reform More rapid poverty reduction More rapid bank branch expansion More female literacy More rural industrialization Ravallion and Datt (2002) Foster and Rosenzweig (2003) Burgess and Pande, (2000) Besley and Burgess, QJE, 2000 More rapid poverty reduction More rapid poverty reduction More rapid poverty reduction

Framework of Accountability Policy Makers Poor People Providers Source: World Development Report 2004

Concept of ‘Good Governance ’

Participation

Transparency

Efficiency

Equity

Accountability

Gender-sensitivity

Source: Empowering the Poor, Angelo Bonfiglioli UNCDF Senior Technical Advisor, 2003

Yardsticks of Budget Planning

Proportionate Allocation of funds based

on development oriented challenges.

Eventual Effectiveness of Allocated Funds

Performance Oriented Funding

WB Support to Change Policies into live Projects

DPC – A Decentralized Approach Tamil Nadu Rs 500 Crore Corpus Fund for District Planning Committee Source: All Villages Anna Renaissance Scheme – 2001,Tamil Nadu State Government 3.5 crore, constituting 56% of people live in villages V-1 V-4 V-2 V-3 Untied funds at local level = Rs.20 Lakh per village

Providers Public Sector Not-for-Profit Sector Private, for-profit Sector

Ministry

Department

Agency/Bureau

Public sector autonomous corporation

Community owned

Not-for-profit Organization

Small for-profit firms

Large for profit firms

We need a frontline Provider who

is capable

has access to adequate resources & inputs

is motivated to pursue achievable goals

“ Third Party ” ? Who?

De-concentration

Devolution

Delegation

Privatization

Source: Decentralization in India: Poverty, Politics and Panchayati Raj, Craig Johnson Department of Political Science University of Guelph, Ontario

Policymakers & Providers Services run by government ( control/comparison, CC ) • NGO manages district, cannot hire and fire (but can transfer staff), ( contracting in, CI ) • NGO can hire and fire, transfer staff, set wages, procure drugs, etc. ( contracting out, CO ) Source: World Development Report 2001 – Attacking Poverty

Educo Program – El Salvador EDUCO promoted parental involvement… … which boosted student performance ( % increase in test scores per visit ) Source: Making Services Work for Poor People Shantayanan Devarajan and Ritva Reinikka

Routes of Accountability

Eight Ways of Delivery & Monitoring Source: World Development Report 2004 Government provision or contracting Central-government provision Pro-poor politics Client power—experiment with contracts. Client power—experiment with providers Pro-rich politics Homogeneous clients De-concentrated central or local government provision with contracting Local or de-concentrated central government provision Pro-poor politics Client power—experiment with community control Client power—imitate market Pro-rich politics Heterogeneous clients Easy to monitor Difficult to monitor

Decentralization is a Key Local Policy Makers Poor People Providers Central Policy Makers The more people differ in their desires, the greater the benefits from decentralizing service provision.

Do’s & Don'ts Don’ts • Do not leave it to the private sector • Simply increasing public spending is not the solution • Do not depend on technocratic solutions Do • Expand information • Tailor service delivery arrangements/ customization

Biggest Qs on this issue?

Managerial Reforms or Institutional Reforms or both?

MRO – Maintaining ,Repairing or Overhauling?

Centralize or Decentralize or both?

Our initiative towards sustainable development “ It would be nice if the poor were to get even half of the money that is spent in studying them.”

Bibliography

World Development Report 2004 : Making Services work for poor

World Development Report 2001: Attacking Poverty

Indian Economic Review, Feb 2008

Overview of Rural Decentralization in India, Vol. 1, September 27, 2000

Empowering the Poor : Local Governance for Poverty Reduction ,Angelo Bonfiglioli UNCDF Senior Technical Advisor, United Nations Capital Development Fund.