EconPapers    
Economics at your fingertips  
 

MGNREGA policies and deterrence of development in rural India: An analytical approach

Partha Dube and Partha Gangopadhyay ()

International Journal of Development and Conflict, 2015, vol. 5, issue 2, 101-113

Abstract: The paper offers two new insights in the context of the Mahatma Gandhi national rural employment guarantee act (MGNREGA) in India: first, we establish that migration of the skilled workers can occur under the MGNREGA scheme due to the low wage rate while the quality of work degrades as skilled workers migrate. As a result, we argue, only subsidies can offer a helpline in this regard. Secondly, this paper also argues that the political economy assumes critical importance for any welfare intervention like MGNREGA. We hence model the political economy of rural sector to explain why MGNREGA policies can fail. We show that, in situations where political parties and politicians can sequentially commit first to de facto (local) tax rates, and then levels and distribution of local public goods such as institutions and infrastructure, the political equilibrium is an underprovision equilibrium. In the underprovision equilibrium, the local government at the grass-root level of democracy chooses low tax rates (de facto) and offers inadequate local public goods, which can thus be an equilibrium outcome, which will in turn deter rural development through MGNREGA policies to eradicate rural poverty.

Keywords: Migration equilibrium; Srinivasan-Bhagwati subsidy; Underprovision equilibrium; Electoral games; Local public goods (search for similar items in EconPapers)
JEL-codes: C78 J31 O21 Q10 R13 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.ijdc.org.in/uploads/1/7/5/7/17570463/dec15_art2_final.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gok:ijdcv1:v:5:y:2015:i:2:p:101-113

Ordering information: This journal article can be ordered from
http://www.ijdc.org.in/issues.html

Access Statistics for this article

International Journal of Development and Conflict is currently edited by Partha Gangopadhyay

More articles in International Journal of Development and Conflict from Gokhale Institute of Politics and Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-10-15
Handle: RePEc:gok:ijdcv1:v:5:y:2015:i:2:p:101-113