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Khemani: Political norms

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Khemani: Political norms

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Khemani: Political norms

  1. 1. S T U T I K H E M A N I D E V E L O P M E N T R E S E A R C H G R O U P T H E W O R L D B A N K N O V E M B E R 2 9 , 2 0 1 9 Political Norms: What do we know about what it is, why it matters for reforms, and what more do we need to know
  2. 2. What are political norms?  Consider Alesina-Drazen’s 1991 AER paper, Why are Stabilizations Delayed?  Immediate stabilization brings social gains over delays  But delays enable bargaining between rival political groups over the distribution of costs of reform  Parameter α: interpreted as “political cohesion” in a society  If 𝛼 = 1 2 , stabilization happens immediately  Political norms are beliefs and expectations in a society about how others are playing the game of politics  which shape parameters that play the role of α, across a variety of models of political constraints to reform
  3. 3. What are political norms? The “political game”: Strategic interaction between “principals” and “agents” in the business of government Citizens Political Leaders Political Leaders Bureaucratic Leaders Bureaucratic Leaders Frontline Staff Citizen engage ment Principal Agent
  4. 4. Insights from “standard” principal-agent models 1. Incentives of political leaders matter  Eg: Corruption is lower, and service delivery performance is better when leaders face re-election incentives (Ferraz and Finan, 2011; deJanvry et al, 2012)  Eg: Health outcomes are better when more voters are effectively enfranchised (Fujiwara, 2015; Khemani, 2015; Miller, 2008) 2. Selection  Eg: Poverty is lower when leaders are selected from among social groups that have historically experienced greater poverty and economic discrimination (Chin and Prakash, 2011)
  5. 5. Insights from “strategic” principal-agent models 1. Noncooperative game among multiple principals with conflicting interests (Dixit, 1996; 2003)  Eg: Persistent and systemic corruption can be understood as a Prisoner’s Dilemma in a game theoretic framework (Dixit, 2018) 2. Beliefs among players about how others are behaving  Eg: Corrupt leaders are not punished because voters believe others are not going to punish corruption (Bidner and Francois, 2013)
  6. 6. Insights from “strategic” principal-agent models 3. Role for professional norms, peer pressure  Alesina-Tabellini (2004) allude to it; Kandel-Lazear (1992) model a peer-pressure function; Evidence consistent with peer pressure in Mas-Moretti (2009) 4. Preference formation over “public goods” or public policies  Eg: Motivated reasoning (Kahan et al), which makes people resistant to persuasion through pure information
  7. 7. Insights from “strategic” principal-agent models 5. Notion of legitimacy  Akerlof (2015) provides a simple model of how leaders can choose to bolster their legitimacy to win compliance with their decisions, but does not model where legitimacy comes from
  8. 8. Example from India  Simple survey question: should the government provide electricity for free?  Posed to different types of respondents in India’s poorest state, Bihar  Among rural household respondents:  25% say no  34% say yes, with a qualification--only for poor people  41% say an unqualified yes  Compare to responses of politicians and urban elite (doctors) in our sample…
  9. 9. How office-holding/elite respondents compare to “ordinary” people in saying electricity should NOT be free:
  10. 10. Example from India (cont.)  What this example shows:  Demand for price subsidies need not be because people lack information or are cognitively constrained—rural poor more likely than urban, educated elite to say “no” to free electricity  Higher-tier political leaders may lack legitimacy to pursue price reforms—people may suspect their motives  Fruitful direction for more policy-research collaboration: can local political leaders help solve the problems of legitimacy/trust?  Research design involves partnership with policy-makers to try-out a local institutional experiment
  11. 11. Insights from “strategic” principal-agent models 6. Interaction between political and bureaucratic agents  Eg: Local government jurisdictions make and implement policies in complex teams with two types of agents—locally elected and technically appointed—who are supposed to work together
  12. 12. HOW POLITICAL SELECTION MATTERS FOR BUREAUCRATIC PRODUCTIVITY Correlates of Public Health Service Delivery by Districts in Uganda
  13. 13. Measuring “integrity”  To what extent do you agree/disagree with the following statements: 1. It is okay to spread rumors to defend those you care about 2. It is okay to take others’ belongings just for some time without their permission 3. Exaggerating one’s own qualities is no big deal 4. If a junior does something wrong under his/her senior’s pressure, it’s not their fault 5. If someone does something wrong under pressure from their friends, it’s not their fault 6. Passing off someone else’s work as your own, and getting praise for it, is no big deal 7. Some people have to be dealt with roughly 8. Some people only deserve rude behavior
  14. 14. Measuring “public service motivation”  To what extent do you agree/disagree with the following statements: 1. To make a difference to society means more to me than personal achievement 2. I am one of those individuals who are good at helping solve problems/conflict between other people 3. Doing well financially is definitely more important to me than public service 4. I think there are many public causes which are worth fighting for 5. I am willing to use every bit of my energy to make society better 6. I am not afraid to defend the rights of others even if I am threatened 7. For me, “politics” is a dirty word 8. I do not think that government can do much to make society fair
  15. 15. Village politicians in Bihar have higher measures of “public service motivation” compared to other village respondents
  16. 16. In villages where politicians report higher public service motivation, women report greater access to health services Correlates of women receiving services from village public health workers
  17. 17. We know too little about the role of professional bureaucracies Interdependency across the three principal-agent relationships --Do strong bureaucracies control the damage of transitory populist waves in politics? --Do weak bureaucracies constrain leaders from pursuing reforms? Citizens Political Leaders Political Leaders Bureaucratic Leaders Bureaucratic Leaders Frontline Staff Citizen engage ment Principal Agent
  18. 18. In theory, we are supposed to know some things How should bureaucracies assign tasks and manage personnel to deliver public goods? 1. Reduced role for high-powered incentives; greater role for selecting intrinsically motivated agents 2. Role for autonomy, professional norms and peer-to-peer monitoring Citizens Political Leaders Political Leaders Bureaucratic Leaders Bureaucratic Leaders Frontline Staff Citizen engage ment Principal Agent
  19. 19. But practice deviates from theory While bureaucracies do tend to have flat wages and job security, public personnel tend to be subject to rigid rules, and to be distrusted Citizens Political Leaders Political Leaders Bureaucratic Leaders Bureaucratic Leaders Frontline Staff Citizen engage ment Principal Agent
  20. 20. Concluding Thoughts 1  Reform needs are deep  “Clever” fixes, such as direct transfers deposited into beneficiary accounts, to win political support for subsidy repeal, are not enough  New generation reforms: strengthening state capacity to support competitive markets, address market failures, and provide public goods for fairness/justice, and to prevent backlash against market  In business of international development, counting incremental policy changes as “reforms”, can create perverse incentives to evade real reforms  Separating out anti-corruption may not make sense—overall problem of state capacity
  21. 21. Concluding Thoughts 2  Challenge of reforming political/state institutions shared between rich and poor countries  Not only does mimicking rich country institutions not work, rich countries too are struggling with the problem  Large knowledge gaps in understanding principal-agent problems of government agencies across different contexts  Not at all clear that well-organized programmatic political parties solves the problem—why is it not analogous to oligopolistic competition in economic markets?
  22. 22. Concluding Thoughts 3  The solution area of transparency, information, communication is not as simple as teaching people that they don’t understand something  Problem is a deeper one of strategic interactions studied in game theory  Communication and reputation building has a role in moving from a low-payoffs, or zero-sum equilibrium, to a higher-payoffs, positive- sum one  Communication strategies have to interact with political and bureaucratic institutions
  23. 23. Concluding Thoughts 4  False distinction between economics and politics  When it comes to addressing problems of “public goods”, as a benevolent social planner in economics would want to, political markets reveal information about whether public policies are performing well  Economic tools of principal-agent theory needed to understand the functioning of political markets and government agencies
  24. 24. Rich agenda for policy-research collaboration  Policy experiments with the design of government institutions  Communication campaigns targeted at strengthening trust in government institutions  Gathering data and evaluating impact around these experiments Citizens Political Leaders Political Leaders Bureaucratic Leaders Bureaucratic Leaders Frontline Staff Citizen engage ment Principal Agent
  25. 25. Extra slides
  26. 26. Importance of Political Norms  Little evidence that some types of formal political institutions are systematically better than others
  27. 27. On the one hand: Acemoglu et al argue that democracy is good for growth
  28. 28. On the other: Besley and Kudamatsu show that some autocracies outperform democracies
  29. 29. Importance of Political Norms  Little evidence that some types of formal political institutions are systematically better than others  Significant variation across places that share the same formal political institutions
  30. 30. Eg: While vote-buying is associated with worse health outcomes… (Khemani, 2015)
  31. 31. Vote Buying Negatively Associated with Service Delivery in Afrobarometer Round 5 Countries Dependent Variable Percent of respondents reporting having experienced vote buying No problems reported in Public Schools No problems reported in Public Health Clinics Ghana 7.00% -0.177*** -0.164*** -0.0423 -0.0385 Kenya 33.40% -0.0418** -0.0722*** -0.0177 -0.0126 Mozambique 5.90% -0.136*** -0.0761*** -0.0261 -0.0275 Nigeria 20.30% -0.116*** -0.109*** -0.0295 -0.0252 South Africa 4.60% -0.335*** -0.125*** -0.0447 -0.0391 Uganda 41.40% -0.0470*** -0.0407*** -0.0125 -0.0101 Vote buying (all Afrobarometer countries) -0.0747*** -0.0614*** -0.00571 -0.00475
  32. 32. …Effective enfranchisement of poor citizens leads to better health outcomes (Fujiwara, 2015)
  33. 33. Importance of Political Norms  Little evidence that some types of formal political institutions are systematically better than others  Significant variation across places that share the same formal political institutions  Concern with “populism” in liberal democracies of rich countries  Research examining variation in “civic” and “uncivic” voting within a European country (Nannicini et al, 2013)

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