Money versus Kudos: The Impact of Incentivizing Local Politicians in India

Ghazala Mansuri, Nethra Palaniswamy, Vijayendra Rao and Slesh Anand Shrestha

No 10186, Policy Research Working Paper Series from The World Bank

Abstract: Despite growing awareness of the various limitations of electoral democracy, there is a relative lack of evidence on effective policy interventions to improve the performance of elected officials and motivate them to act more equitably. This paper reports the results from an experiment in which elected presidents of village governments in Tamil Nadu, India, were randomly assigned to one of two incentive schemes (or a control group): a financial incentive that rewarded better performing presidents with a higher public budget, and a nonfinancial incentive that awarded them a certificate demonstrating their achievement with an information campaign to disseminate it. The findings show that both incentives improved access to public investments and private transfers in the villages of incentivized presidents. The nonfinancial incentive also led to a more equitable between-hamlet allocation of resources within the village, and this effect was more acute with officials who faced potentially more competitive elections. The paper shows that the results are consistent with a theoretical model where imperfect voter information drives inequities in resource allocation, and interventions that provide credible information on politician quality motivate elected representatives to act more equitably.

Date: 2022-09-19
New Economics Papers: this item is included in nep-pol
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Journal Article: Money versus Kudos: The impact of incentivizing local politicians in India (2023)
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