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Private Actions and Public Outcomes

Jati, Local Public Goods and Village Governance

Whether voting along narrow parochial lines in socially and ethnically fragmented societies has measurable gains is explored. Using data from rural India, it is established that identity-based voting, driven by membership in social and informal networks, will lead to enhanced participation in welfare programmes, which in turn leads to increased consumption growth. Further, reducing agency costs does not necessarily remove the need for identity-based voting, and such voting behaviour is a means for engaging in the capture of public and private benefits by these groups.

Apart from their own private consumption, households derive utility from public goods and services. Indeed, the disutility resulting from the paucity of public goods and services, such as roads, education, health centres and the like, could be very significant and, in some cases, even overwhelm the utility from private consumption.

By their very nature, such services are collectively provided and, in rural India, such provision is quite scarce. This has led to less-than-satisfactory human development outcomes and prompted Parliament to pass the 73rd and 74th amendments to the Constitution in 1992 for local self-governance and decentralisation. The rationale was that such decentralisation and self-governance would lead to improved decision-making, and augment and make the provisioning of public goods more equitable. The local self-governance institutions entrusted with this task are the panchayats.

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Updated On : 16th Dec, 2019

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