Robin Burgess

The Political Economy of Government Responsiveness: Theory and Evidence from India

The determinants of government responsiveness to its citizens is a key issue in political economy. Here we develop a model based on the solution of political agency problems. Having a more informed and politically active electorate strengthens incentives for governments to be responsive. This suggests that there is a role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reflected in policy. The ideas behind the model are tested on panel data from India. We show that public food distribution and calamity relief expenditure are greater, controlling for shocks, where governments face greater electoral accountability and where newspaper circulation is highest.

Can Labor Regulation Hinder Economic Performance? Evidence from India

This paper investigates whether the industrial relations climate in Indian States has affected the pattern of manufacturing growth in the period 1958-92. We show that pro-worker amendments to the Industrial Disputes Act are associated with lowered investment, employment, productivity and output in registered manufacturing. Regulating in a pro-worker direction is also associated with increases in urban poverty. This suggests that attempts to redress the balance of power between capital and labour can end up hurting the poor.

Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment

Lack of access to finance is often cited as a key reason why poor people remain poor. This paper uses data on the Indian rural branch expansion program to provide empirial evidence on this issue. Between 1977 and 1990, the Indian Central Bank mandated that a commercial bank can open a branch in a location with one or more bank branches only if it opens four in locations with no bank branches. We show that between 1977 and 1990 this rule caused banks to open relatively more rural branches in Indian states with lower initial financial development. The reverse is true outside this period. We exploit this fact to identify the impact of opening a rural bank on poverty and output. Our estimates suggest that the Indian rural branch expansion program significantly lowered rural poverty, and increased non-agricultural output.

Land Reform, Poverty Reduction and Growth: Evidence from India

In recent times there has been a renewed interest in relationships between redistribution, growth and welfare. Land reforms have been central to strategies to improve the asset base of the poor in developing countries thought their effectiveness has been hindered by political constraints on implementation. In this paper we use panel data on the sixteen main Indian states from 1958 to 1992 to consider whether the large volume of land reforms as have been legislated have had an appreciable impact on growth and poverty. The evidence presented suggests that land reforms do appear to be associated with poverty reduction.

Halving Global Poverty

The Millennium Development Goals--global targets that the worlds leaders set at the Millennium Summit in September 2000--are an ambitious agenda for reducing poverty. As a central plank, these goals include halving the proportion of people living below a dollar a day from around 30 percent of the developing worlds population in 1990 to 15 percent by 2015--a reduction in the absolute number of poor of around one billion. This paper examines what economic research can tell us about how to fulfill these goals. It begins by discussing poverty trends on a global scale--where the poor are located in the world and how their numbers have been changing over time. It then discusses the relationship of economic growth and income distribution to poverty reduction. Finally, it suggests an evidence-based agenda for poverty reduction in the developing world.

The behaviour of state firms in eastern Europe, pre-privatisation

In this paper we explore the behaviour of state firms pre-privatisation, the incentives and the constraints facing managers and the nature and the power of the coalitions within the firms. We show that managers on low incentive payment schemes with little formal stake in privatisation and who face possible redundancy have little incentive to embark on restructuring. Hardened budget constraints, career concerns and potential stakes in the privatised firm, however, may strengthen managerial incentives to restructure. We then introduce an ‘influence’ function which captures how the distribution of winners and losers within the firm and size of their loss and gain affects the probability of restructuring. The function illustrates how strong opposition coming from large concentrated losses is likely to dominate diffuse support from small, widely distributed gains. Government measures such as hardening budget constraints, financing of severance payments, and selective debt writedowns affect the distribution of gainers and losers and may be used to overcome blocking coalitions and increase support for restructuring. Examination of a range of enterprise case studies vindicates our hypothesis that the structure of control and production strongly affect incentives to restructure. Centralised management structures, the presence of non-performing units and a functional division of activities have all acted as serious constraints on the unbundling/restructuring process whilst the removal of state subsidies has been critical in forcing firms to rationalise production and unbundle activities.

Political agency, government responsiveness and the role of the media

Abstract The role of mass media in making governments responsive to the needs of citizens is a relatively neglected area in economics. We sketch a theoretical example with a role for media in enhancing government responsiveness based on asymmetric information between citizens and government. We then use data for the period 1958–1992 on the extent to which Indian state governments responded to food shortages via the public distribution of food, correlating these with proxies of media, political and economic development. We find that states that are more responsive tend to also be those with high levels of newspaper circulation, electoral turnout and literacy. In contrast, richer states do not tend to be more responsive than poorer states.

Empowering adolescent girls : evidence from a randomized control trial in Uganda

This brief summarizes the results of a gender impact evaluation study, entitled Empowering adolescent girls : evidence from a randomized control trial in Uganda, conducted in the year between June and September 2008, in Uganda. The study observed that nearly 60 percent of Ugandas population is aged below 20. This generation faces health and economic challenges associated with HIV, early pregnancy and unemployment. Whether these challenges are due to a lack of information and/or vocational skills is however uncertain. The program significantly increases self-reported entrepreneurial skills. There is a 4.2 percentage point increase in likelihood of participation in income earning activities, which represents a 32 percent increase. Almost all of this increase is seen in self-employment activities. Funding for the study derives from Bank Netherlands, MasterCard, Nike, The Gender Action Plan, improving institutions for Pro-Poor Growth at DFID.

Women's Empowerment in Action: Evidence from a Randomized Control Trial in Africa ¤

Women in developing countries are disempowered: high youth unemployment, early marriage and childbearing interact to limit their investments into human capital and enforce dependence on men. We evaluate a multifaceted policy intervention attempting to jump-start adolescent womens empowerment in Uganda, a context in which 60% of the population are aged below twenty. The intervention aims to relax human capital constraints that adolescent girls face by simultaneously providing them vocational training and information on sex, reproduction and marriage. We find that four years post-intervention, adolescent girls in treated communities are 4.9pp more likely to engage in income generating activities, corresponding to a 48% increase over baseline levels, and an impact almost entirely driven by their greater engagement in self-employment. Teen pregnancy falls by a third, and early entry into marriage/cohabitation also falls rapidly. Strikingly, the share of girls reporting sex against their will drops by close to a third and aspired ages at which to marry and start childbearing move forward. The results highlight the potential of a multifaceted program that provides skills transfers as a viable and cost effective policy intervention to improve the economic and social empowerment of adolescent girls over a four year horizon.

War and deforestation in Sierra Leone

The impact of armed conflict on the environment is of major public policy importance. We use a geographically disaggregated dataset of civil war violence together with satellite imagery of land cover to test whether war facilitated or prevented forest loss in Sierra Leone. The conflict data set allows us to establish where rebel groups were stationed and where battles and attacks occurred. The satellite data enables to us to monitor the change in forest cover (total, primary, and secondary) in all of Sierra Leones 151 chiefdoms, between 1990 (prior to the war) and 2000 (just prior to its end). The results suggest that conflict in Sierra Leone acted as a brake on local deforestation: conflict-ridden areas experienced significantly less forest loss relative to their more conflict-free counterparts.