During the 1990s decentralisation was prescribed by bilateral donors and major economic players as a general solution to development problems. The World Bank, for example, argues for the devolution of power almost as if it were the panacea bringing "the advancement of 'good government' and fiscal responsibility", and above all more democracy (Manor 1995:81). Today, however, policy makers recognise that what determines the outcome of decentralisation is a more complicated issue. Or as one observer puts it, decentralisation can in one context lead to improved democratic performance, while in another it can lead to anything from a decline in economic growth to "ethnic strife and civil war" (Yusuf 1999). Against this background the panchayat reforms initiated in India in the 1980s and 1990s, which may turn out to be one of the world's largest decentralisation schemes, naturally attracts attention.
After being undermined in the 1960s and 1970s, the Asoka Metha committee report presented in 1977 recommended that Panchayati raj institutions in India should become an "organic, integral part of [the] democratic process." West Bengal was the first state to try to implement the recommendations but Karnataka, Andhra Pradesh and Jammu and Kashmir soon followed. In many parts of these states democratic performance improved as a direct consequence of the reforms and this paved the way for decentralisation in other states. A number of constitutional amendments, most of them passed in 1992, established a uniform three-tier system below state level, provided with political, fiscal and other institutional mechanisms safeguarding, at least constitutionally, the devolution of power. Today, however, it is hard to judge what improvements have followed from this process. As in many other developing countries, empirical research on decentralisation, and above all systematic research, is to a great extent lacking (Goudie and Stasavage 1998:154; Lancaster and Montinola 1997:194). There are, however, important and relatively successful cases that deserve attention. They may provide indications of what is needed to make local democratic units efficient and more self-sustainable, and they may also tell us something about the type of policy recommendations that may be suitable in specific contexts. Therefore, this project will carry out a case study of the factors that may determine the different outcomes of decentralisation - and, in particular, why reforms can manage to improve democratic and governance performance in spite of a hostile or harsh institutional environment, and why they may fail in other contexts. The specific cases to be studied are how the panchayat reforms have affected one of the biggest problems of schools and health institutions in India - personnel absenteeism. The analyses will utilise hypotheses derived from the fields of political science, economics, and social science in general. Theories on decentralisation, corruption and social capital will provide relevant ideas to be tested. The project will primarily investigate mechanisms that may have played a crucial role in making education and health services more effective as a consequence of giving more power to local democratic governing bodies in the decentralisation schemes.
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