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Financial inclusion through a public works programme: Does left‐wing extremism make a difference?

Saibal Ghosh

Development Policy Review, 2019, vol. 37, issue 1, 19-45

Abstract: Using district‐level household data, the study investigates the impact of left wing extremism (LWE) violence on financial inclusion in India. Exploiting the staggered roll‐out of a major public works programme, we find that the programme has the potency to improve financial inclusion, notwithstanding the deleterious effects of higher LWE violence. These findings are, however, different in the post‐Pradhan Mantri Jan Dhan Yojana (Prime Minister's People Money Scheme) phase, especially in the short run wherein there is an increase in both access to and use of finance. The findings are consistent with the citizen support model and suggest that demonstrable government commitment in the form of spending on public works has the capacity to raise financial inclusion, even if the programme occurs in LWE‐affected districts.

Date: 2019
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Handle: RePEc:bla:devpol:v:37:y:2019:i:1:p:19-45