Do Elected Councils Improve Governance? Experimental Evidence on Local Institutions in Afghanistan

Abstract

Using data from a field experiment across 500 villages in Afghanistan, we study how electoral accountability of local institutions affects the quality of governance. Food aid distribution was organized to obtain outcomes that are comparable across villages with different structures of governance. In villages with newly created elected councils, food aid distributed by local leaders is more likely to reach needy villagers. However, this effect is observed only if the council is mandated to be the entity responsible for managing the distribution. If management of the distribution is not explicitly assigned to either the elected council or to customary leaders, the presence of elected councils increases embezzlement and renders decision-making less inclusive, without affecting aid targeting. Mandating the inclusion of women in the management of aid distributions in villages without elected councils also increases embezzlement. Thus, while elected councils can improve governance, unclear and overlapping mandates between new and pre-existing institutions may increase rent-seeking and worsen governance outcomes.

Keywords: political institutions, field experiment, democratization, governance quality

JEL Classification: D7, O1