Do Elected Councils Improve Governance? Experimental Evidence on Local Institutions in Afghanistan
47 Pages Posted: 18 Jan 2013 Last revised: 27 Nov 2013
Date Written: September 15, 2013
Using data from a field experiment in 500 villages, we study how local institutions affect the quality of governance, as measured by aid distribution outcomes. In villages where elected councils exist and manage distributions, aid targeting improves. However, if the distribution is not clearly assigned to either the council or to customary leaders, the creation of elected councils increases embezzlement and makes decision-making less inclusive. Requiring that women manage the distribution jointly with customary leaders also increases embezzlement. Thus, while elected councils can improve governance, overlapping mandates between new and existing institutions may result in increased rent-seeking.
Keywords: political institutions, field experiment, democratization, governance quality
JEL Classification: D7, O1
Suggested Citation: Suggested Citation