Indirect Rule and Public Goods Provision: Evidence from Colonial India
42 Pages Posted: 14 Sep 2020
Date Written: November 20, 2019
This paper examines the persistent effect of historical institutional differences in colonial India on the contemporary provision of public goods. In particular, it explores the long-term effects in directly and indirectly ruled areas. It looks at a single region of India, which has areas that historically experienced both direct and indirect institutions. The theoretical mechanism focuses on the differences in the local leaders' incentives and emphasizes that the colonizer's formal accountability is more efficient than informal accountability in the absence of effective control mechanisms. Unlike local princes, colonizers in directly ruled territories had stronger incentives to provide goods, because of more restriction by the necessity to extract resources. A spatial regression discontinuity design is used to compare territories with direct and indirect rule. The empirical results show that indirect rule has long-term negative effects on the provision of various public goods.
Keywords: indirect rule, colonial legacies, accountability, local incentives, public goods
Suggested Citation: Suggested Citation