Inequality, Institutions, and Service Delivery

1. Political Obstacles to Equity in Opportunities:Inequality, Clientelism, and Service DeliveryStuti KhemaniDevelopment Research Group & Africa Chief Economist OfficeThe World BankJune 10, 2011

2. Inequality, Institutions, and Service Delivery • Inequality in endowments and opportunities at the center of political economy theories of weak institutions, inefficient redistribution, and persistent economic underdevelopment (Rajan, 2009; Engerman and Sokoloff, 2005; Acemoglu et al 2001; Alesina and Rodrik, 1994) • Several pathways, one through service delivery: Inequality  historic variation in education investments  persistent inequality and poor institutions for development (Engerman, Mariscal, and Sokoloff, 2002)

3. Inequality, Institutions, and Service Delivery (cont.) • Land revenue and colonial institutions  economic and social inequalities  lack of collective action  poor quality public services  persistently lower literacy and higher infant mortality (Banerjee and Iyer, 2005)

4. Political mechanisms? When the poor are the median voters? • Not clear that the educated oppose education for all • Not clear that the poor and uneducated, who stand to benefit the most from free public education, don’t have the numerical strength to win education reforms • Indeed, democratization in Africa (transition to competitive elections, with turnover in political power) associated with policies of universal, free primary education, and lower infant mortality (Harding and Stasavage, 2011; Kudamatsu, 2011) • Greater voter turnout in India is associated with higher share of education in public spending, and more so in states characterized as “poor governance” (Khemani, 2010)

5. Yet, large political constraints to service delivery • Greater spending may not lead to better services, and HD outcomes for the poor, but to political patronage and rents • Political economy of teacher recruitment and management beginning to be understood in India (Kingdon and Muzammil, 2001; Beteille, 2009; Chhibber and Nooruddin, 2004) • High public-sector teacher wage bill, high teacher absenteeism (Glewwe and Kremer, 2006), and poor learning outcomes in Africa (Uwezo, 2011) • Why?—inequality and poverty enable clientelism in political strategies--jobs and targeted benefits in direct exchange for political support

6. Inequality, Poverty, and Clientelism • Theory: High inequality and low productivity  choice of clientelism in political strategies  (Robinson and Verdier, 2002) • Intuition: Inequality in citizen organization around public policies; greater vote returns from small targeted transfers to poor citizens  lower levels of broad public goods (Khemani, 2010) • Evidence? Is clientelism associated with lower access to basic public services in poor communities? Or, is the theory weak?

7. Problems with measuring clientelism, and linking to service delivery • Lack of micro data measuring both clientelism and service delivery • General difficulty in distinguishing when benefits are provided as part of a clientelist strategy (with concomitant effects on rents and public goods) • …Versus when appropriately provided to the poor and needy, who may (legitimately) respond with rewarding a pro-poor government • Opportunity in the Philippines—decentralized politics and service delivery in municipal governments (Khemani, 2011)

8. Evidence from the Philippines • Vote-buying: widely prevalent, and measurable, clientelist strategy in SE Asia–exchange of money for votes at the time of elections (Schaffer, 2006; Stokes, 2007; Kitschelt, 2000) • Basic service delivery by municipal governments—responsibility and resources for maternal and child health services • Survey of 1200 households with children under 6, in 30 municipalities, drawn from 60 “villages” (barangays), in one province (Isabela) • Barangay-level health facility data—child weight records; number of health workers; health projects • Contrast vote-buying with measures of assistance to citizens in times of need (following recent typhoon in the Philippines)

9. Evidence from the Philippines • On average, 38% of respondents in a barangay report vote-buying in municipal elections, with considerable variation in percentage across barangays within the municipality (from 0 to 94%) • Systematic, significant, and robust correlation of lower access to health services in places with greater vote-buying --after controlling for a host of variables that could independently be correlated both with health services and with clientelist strategies (barangay and household poverty; household education, social and political capital; barangay location and roads condition; mayor’s family economic power; mayor’s political affiliations; competitiveness of elections; presence of political “clans”)

10. .8 .6 Number of trained assisted births .4 .2 0 0 .2 .4 .6 .8 1 Vote-buying, village average Evidence from HH data: In villages with greater vote buying, fewer assisted child births reported by mothers

11. .1 .05 Village % of children with below normal weight 0 -.05 0 .2 .4 .6 .8 1 Vote-buying, village average Evidence from village facility records: In villages with greater vote-buying, higher percentage of village children with below-normal weight

12. Evidence from village facility data: In villages with greater vote-buying, fewer number of village health workers

13. Vote-buying versus assistance provided in times of need • “If the recent typhoon affected your family, did you receive assistance from X? “ (aggregate for all political/government sources) • Barangay-level percentage of respondents answering “yes”, uncorrelated with barangay-level health outcomes, health projects, health workers • Households living in barangays where more people reported receiving assistance, more likely to report receiving birthing assistance as well • Something particular captured in “vote buying” which is different from receiving assistance in times of need

14. What is likely to explain variation in vote-buying? • Monopoly economic power of politicians (Medina and Stokes, 2002) • Social and political networks (Finan and Schechter, 2011) • Poverty (Stokes, 2005) • Unfortunately, don’t have good measures of “inequality” in the Philippines context

16. Landholding mayor family directly associated with lower access to health services

17. Evidence from the Afrobarometer in Tanzania, 2008 • Poverty and inequality could enable violence and intimidation as political strategies • 49% fear becoming victims of intimidation or violence at the time of elections; 52% fear reprisals or punishment should they complain about the quality of government services or misuse of funds • Indicators of poverty associated with higher likelihood of fear of political intimidation and reprisals/punishment

19. Conclusions/Arguments • Poverty and inequality enable clientelism and intimidation in political strategies • Which in turn allow politicians to get away with large rents and poor quality public services, reducing equity in opportunities, thereby sustaining inequality • Governance interventions to tackle clientelism and intimidation, and improve political incentives for service delivery, have equity payoffs • Identify tractable (donor-led) governance interventions that achieve equity in opportunities on a larger scale; Lessons from mass media (radio) in Benin (Keefer and Khemani, 2011ab)