Core supporters or swing voters: What matters for MNREGA fund allocation?

Do political incentives influence the allocation of funds by local politicians to their constituencies? Do they favour certain wards in their constituencies, and if so, do they target their core supporters or swing voters? And are there electoral rewards in targeting certain types of voters?

During 2008-2013, there were two principal contesting parties in West Bengal with dissimilar political ideologies: a coalition of leftist parties – the Left Front (LF) – led by the Communist Party of India (Marxist) (CPI(M)), and the Trinamool Congress (TMC). The fact that there were two political parties in different parts of the state running the GPs allowed us to see whether there was any difference in the behaviour of these two parties in the manner in which they targeted certain constituencies and whether this led to differences in electoral rewards for the two political parties.

 [su_pullquote align=”right”]Voters may prefer a particular party or candidate for reasons other than whether the MNREGA was implemented well in the constituency or not. [/su_pullquote]

To understand whether political incentives mattered in the allocation of MNREGA funds by local politicians, we faced two empirical challenges. Firstly, if we see a positive association between the allocation of public funds to a constituency or better MNREGA implementation and whether the constituency is under the control of the incumbent party, it could be due to the party’s innate preference to favour certain constituencies, rather than a deliberate strategy to win votes. Secondly, a similar challenge exists in establishing that the targeting of MNREGA funds to certain constituencies implied that voters in these constituencies rewarded the incumbent party with greater support in the next elections. Voters may prefer a particular party or candidate for reasons other than whether the MNREGA was implemented well in the constituency or not.

To address the first challenge, we looked at the constituencies where politicians of the ruling party marginally won elections at the village level versus the constituencies where they marginally lost. Since constituencies where the ruling party marginally won elections should be no different than the constituencies where they marginally lost, comparing the constituencies in this way allowed us to see whether MNREGA allocation of funds or its implementation in constituencies where the ruling party marginally won differed significantly from the cases where the ruling party marginally lost constituencies. If we did find that there was a significant difference, we could attribute this to the targeting of the winning constituency by the ruling party. To address the second challenge, we looked at the effect of increased MNREGA funds and implementation that could be reliably attributed to targeting of marginal constituencies by the ruling party on electoral returns of the incumbent party.

We find clear evidence that after the 2008 Panchayat elections, the ruling party at the GP level significantly spent more MNREGA funds in all the following years in their own party constituencies as compared to the constituencies of their opponents. Our estimates suggest that a village which is a ruling party’s winning village receives Rs. 38,750 more in terms of MNREGA expenditure compared to a non-ruling party’s village, and that households in the ruling party’s winning village receive 3.59 days more of MNREGA work compared with the households in the non-ruling party’s village.

Targeting swing voters vs. core supporters

In Figure 1, where we see a sharp jump in MNREGA allocation of funds to constituencies and days worked where the ruling party marginally won at just over 50% of the votes, versus constituencies where they marginally lost to the opponent party. This suggests that the ruling party in West Bengal targeted swing constituencies instead of the constituencies where they had core support (that is, constituencies where they had the majority of votes).

However, we find that the targeting of marginal constituencies differed between the two main political parties – while TMC-run GPs targeted marginal constituencies, CPIM-run GPs did not. As is clear from Figure 2, there was a significant difference in MNREGA fund allocation and implementation between the constituencies. TMC marginally won versus the ones they marginally lost. But we find no such difference in MNREGA allocation of funds or implementation between marginal constituencies won by the CPIM and the marginal constituencies that they lost (Figure 3).

What explains the difference in behaviour between the two political parties? We conjecture that the differences in behaviour between the two political parties can be attributed to the anticipation of regime change in the state as the TMC was making strong inroads in the GPs formerly held by the CPI(M), which provided little incentive for the CPI(M) to engage in targeting swing constituencies, as well as the class background of the potential beneficiaries of the MNREGA, who were agricultural labourers that have historically not been the core supporters of the left regime in West Bengal.

Figure 2. Effect of TMC being GP-level ruling party on village-level MNREGA outcomes

Figure 3. Effect of CPI(M) being GP-level ruling party on village-level MNREGA outcomes

Electoral returns

 Policy implications

This shows that to understand why social welfare programme work well or not in the Indian context, more attention needs to be paid to the incentives of political parties to implement them well.