The Political Economy of Government Responsiveness: Theory and Evidence from India

This article is a political economy analysis of the responsiveness of governments to the needs of vulnerable populations in situations that require state-based food distribution and disaster aid. The authors seek to examine how democratic institutions and mass media have affected the responsiveness of state-level governments in India from 1958-1992. The authors posit several theories that suggest that more informed and politically active electorates strengthen the system of incentives for government responsiveness. "Among other things, the approach highlights the importance of information flows about policy actions in increasing government responsiveness, particularly the role of mass media in creating an incentive for governments to respond to citizen's needs". They then test these models against data from a variety of sources. Their key finding is that governments are more responsive in areas where local language newspaper circulation is higher and that incumbents are driven to be responsive by political competition and voter turnout.

Key Observations

The authors of this article believe that, "understanding what makes government responsive to citizens' needs is a key issue in political economy." This is in part because of the importance in determining which institutions are most likely to contribute to the "effectiveness of the state in social protection." The authors are interested primarily in the economically poor and vulnerable groups in developing societies, whose concerns are less likely to be heard by governments. These are groups and individuals who are typically poorly informed and often have much lower rates of voting participation and political agency than those that are more economically and socially advantaged.

India is an ideal case study because of its large disadvantaged population and because it is regularly impacted by natural shocks such as droughts, floods, earthquakes and cyclones. It is also amenable to this study because of the variety of observable differences between regions, because of its long democratic history, and because of its vibrant but regionally differentiated mass media (newspaper) presence.

This paper uses a series of complex economic models that allow for the generation of comparable coefficients between regions on a variety of axis. The main dependent variables in this study - designed to be proxies for government responsiveness - are government distribution of food (in times of poor crop yields or disaster) and expenditure on disaster relief aid.

The theoretical framework "isolates the key ingredients behind the logic of responsiveness." In it, the authors model the retrospective voting decisions of citizens who are imperfectly informed about the actions of an incumbent politician. There are three types of incumbents: altruistic incumbents that always maximise their effort; selfish incumbents that never put in any effort; and opportunistic incumbents who put in effort if it enhances their re-election chances. Incumbent effort is not, however, directly observable to vulnerable populations, though the more effort the incumbent puts in the more likely information about that is to be passed to voters. In addition, greater media activity is assumed to have a marginal impact on information about effort. At election time, it is assumed that vulnerable uniformed citizens do not vote, vulnerable informed citizens vote for the candidate that has appeared to put in the most effort, and non-vulnerable groups vote along ideological lines (they are effectively controlled out of the study as they are not the subject of this enquiry). These relationships are presented in the form of very complex econometric models.

The model results in the following propositions. Effort by an opportunistic incumbent is higher if:

1. voters have greater media access
2. there is a higher turnout in elections
3. there is a larger vulnerable population
4. the incumbent has a lower advantage

The authors' model "creates a link between incumbent and actions and re-election incentives by supposing that voters use observations about incumbent effort as information about the incumbent's underlying type." The incentive structures are generally most effective in the case of opportunistic incumbents who are responsive when it is in their electoral interests and when attempting to distinguish themselves from "deadbeat" candidates.

To test the model the authors look at the determinants of the public distribution of food, and state government expenditures on disaster relief. These programmes were both set up to deal with the threat posed by chronic and calamity related famine. The Indian public food distribution system involves large-scale government activity in the procurement, storage, transportation, and distribution of food grains while disaster relief expenditures by state governments cover a range of direct relief measures including drinking water supply, medicine and health.

The mass media format that the authors examine is that of the newspaper industry. Unlike most other low-income countries, India's newspaper industry has long been relatively free and independent. The Indian press has played a major role in monitoring the actions of politicians and in ensuring their responsiveness to the frequent droughts and floods.

The authors present the means and standard deviations data for all of the indicators in all sixteen of the states under study. The need for government intervention is proxied by food grain production per capita in each state and real per capita food damage to crops from floods. Media development is proxied by newspaper circulation, both at the aggregate level and delineated by language of circulation and source of ownership.

There are substantial differences across states that illustrate the variation in terms of government responses, indicators of need, newspaper circulation, and political outcomes. Public food distribution per capita is seven times higher in Kerala than in Madhya Pradesh, while newspaper circulation levels tend to be higher in Kerala, Tamil Nadu, Maharashtra, Karnataka, Punjab, and West Bengal and lower in Bihar, Uttar Pradesh, Orissa, Madhya Pradesh, and Rajasthan. There is also considerable variation in electoral turnout and political competitiveness across states. Variation along these different dimensions will be exploited to examine how politics affects government responsiveness.

The methodology that the authors follow in performing the empirical analysis is, as stated before, extremely complex and it is not possible to reproduce the equations here. Instead this summary will simply present the results of the analysis under the same headings used by the authors in their article.

Policy Responses:
The authors use data on public food distribution and calamity relief expenditure to measure government reactions. There is an expected a negative association between public food distribution and food grain production (less food assistance during good crop periods). However, public food distribution appears to be unrelated to flood damage. These findings provide two well-defined policy responses to base further analysis.

Determinants of Government Activism:
The authors suggest that one might expect richer states to have more developed response mechanisms and that population density, urbanisation, and log population should also relate to the ease of reaching target populations. The authors did not, however, find any relationship between state income and public food distribution or calamity relief expenditures. Nor did revenue from the centre or population density have an impact. More urbanised states have higher levels of public food distribution though the effect is negated when media and political variables are controlled for. A larger population is correlated with lower per capita public food distribution. None of the above factors appear to affect calamity relief expenditures, and overall, government responsiveness does not appear to be impacted by economic factors.

The data also reveal strong, significant, and positive correlations between newspaper circulation levels and the two measures of government responses. A 1% increase in newspaper circulation is associated with a 2.4% increase in public food distribution and a 5.5% increase in calamity relief expenditures. It appears that states with higher levels of media development are more active in protecting vulnerable citizens - a finding that is consistent with the idea that it is linked to political accountability.

Of the political factors observed, greater electoral turnout was meant to serve as a proxy for the general level of political activism and likelihood that voters will reward incumbents who perform well. The results however, contradicted this prediction with only an intermediate association with higher levels of public food distribution and none for disaster relief. The theory also predicted that greater political competition would result in a more substantive response - which was true in the case of food distribution but not for disaster relief. The authors suggest that the results point to the "centrality of mechanisms for improving accountability beyond the role of economic development as a means of encouraging government activism," which they note is in keeping with calls for improved governance by the World Bank and other international actors.

Newspapers and Responsiveness:
The authors provide an in-depth analysis of the relationship between media and government responsiveness. The interactions were found to be significant for both policy responses - a fall in food production yields more public action in situations where newspaper circulation is higher and crop damage from floods yields more disaster relief expenditures when newspaper circulation is higher. The magnitude of this difference is substantial - a 10% drop in food production is associated with a 1% increase in public food distribution in states that are at the median in terms of newspaper circulation per capita, whereas for states that are in the 75th percentile in terms of newspaper circulation per capita, the same drop was associated with a 2.28% increase in public food distribution. These findings are consistent with the authors' theories that a given shock will be responded to more by an incumbent when media is more highly developed.

For further specificity the authors also consider newspaper circulation when disaggregated by language - an important consideration given India's linguistic diversity. The authors have data on newspapers published in 19 different languages, and they believe that it is more likely that newspapers published in languages that are state specific will report localized events and that the readership will be composed of local vulnerable populations (who are typically less likely to read English of Hindi). Thus these papers may have greater influence on state level politicians.

Overall, circulation of English newspapers has not increased over the period, while Hindi newspapers have, on average, grown 5.8% per annum, though this varies from state to state from +24% to -17%. Overall, non-English, non-Hindi newspaper circulation grew at 1.7% with maximum growth of 7% in Bihar and declines in three other states.

The data revels that neither English nor Hindi circulation is associated with higher levels of public distribution or calamity relief at the state level. It is "other" language newspaper circulation that drives the results. Interaction terms for both Hindi and English newspapers are both insignificant while those for "other" newspapers are significant and strong. Regional presses, which have a greater incentive to cover local issues, are at the heart of why media development encourages government responsiveness.

Conclusions
The authors argue that "an effectively functioning democracy has many facets," and robust incentive structures for elected officials are an important component. They believe that elections provide impetus for politicians to perform, and that this system can be enhanced by development of the media. Other factors are also important, such as turnout, political competition, and the timing of elections. In addition, the results highlight the importance of local language newspapers in transmitting information. They conclude that, representative democracy and the development of free and independent regional presses appear as key factors in ensuring protection for vulnerable citizens with these concluding quotes:

"Overall these results suggest a rather persuasive role for newspapers in driving greater responsiveness in a way that the theory suggests should be the case."

"The formal institutions of political competition (such as open elections) are not sufficient to deliver responsive government unless voters have real authority to discipline poorly functioning incumbents. This requires effective institutions for information transmission to voters."