Tuesday, March 11, 2008

National rural employment guarantee act, India

Niraj gave an SJC today on the National Rural Employment Guarantee Act in India. The slides are available at: http://floatingsun.net/udai/files/SJC_NREGA.pdf

As is common with almost any other government scheme, NREGA has produced mixed results. The usual story: 101 different ways in which corruption happens, local needs are not understood, poor execution because the government staff is not adequately trained, etc, etc. All is not dark though, it does work in a few cases. And implementations are in progress using smart card based accounting systems to prevent corruption.

However, the very premise of this scheme is under doubt. There are already government programs for building roads, improving watersheds, etc. And NREGA is funding very similar activities. Therefore, either NREGA is just a different name for these programs, or it is giving more funds to these programs. Essentially, it is not doing anything really different, and it is not trying to solve the major problems of corruption and bad planning with which all government programs suffer. Instead, it complicates program management by adding an extra parameter of giving job cards to people to guarantee 100 days of employment per year.

All of this sounds pretty much like a broken record. Bad policies, bad management, missing channels of accountability, inadequate transparency, ignorant people who do not question authority...

This somehow brought our discussion to a very abstract level of what an ideal governance structure should look like. In general, systems decentralized politically and administratively all the way to the Panchayats, with transparency in their functioning, would work much better. Decentralization has however been very slow to come about. There is clearly an incentive against decentralization because those in power do not want to let it go. This recent article from The Economist talks about it quite well:

In the next month of so, we are planning to study some papers about governance structure, and how it influences the success of development/ welfare programs. If you know of some good resources, hopefully those that go beyond anecdotal examples, then please let us know.