Krzysztof Krakowski (Collegio Carlo Alberto)

“Decentralization of Local Public Goods and Conflict: Evidence from Irrigation in India”

Abstract: Can decentralization of local public goods in diverse communities reduce conflict? Focusing on irrigation decentralization reforms in India, we analyze its consequences for both community-vs-state and local inter-group conflict using two-way fixed effects models. As presence of the state is reduced, we find that the decentralization of irrigation correlates with less community-vs-state conflict. In the case of inter-group conflict, however, the effects vary with the technology of irrigation, creating differential incentives for co-operation and exclusion of disadvantaged groups. On one hand, decentralization of private-like wells is associated with reduced inter group conflict due to greater incentivizes to cooperate, increasing social welfare (as measured by wages and productivity) and social inclusion. On the other, decentralization of public-like surface irrigation is associated with higher incidence of inter-group conflict due to exclusion of disadvantaged groups. Tentative evidence suggests that the documented effects can have long-term implications for inter-group relations.

Joint with Karol Mazur, University of Oxford