The Political Economy of Pro-Poor Growth Evidence from Education Policies in India and Brazil Nicole Rippin and Bettina Boekle-Giuffrida © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 1 The Political Economy of Pro-Poor Growth: Evidence from Education Policies in India and Brazil 1. Introduction 1. Introduction 1.1 Pro-Poor Growth 1.1 Pro-Poor Growth 1.2 Education Puzzle 1.2 The “Education Puzzle” 2. Theoretical Framework 2. The Theoretical Framework 2.1 Policy Formulation 2.1 Possible Equilibriums in Policy Formulation 2.2 Policy Implementation 2.2 Possible Equilibriums in Policy Implementation 3. Empirical Application 3.1 Methodology 3. The Empirical Application 3.2 Country Case India 3.1 Methodology 3.2.1 Formulation 3.2.2 Implementation 3.2 Country Case India 3.3 Country Case Brazil 3.2.1 Policy Formulation in Andhra Pradesh and Tamil Nadu 3.3.1 Formulation 3.2.2 Policy Implementation in Andhra Pradesh and Tamil Nadu 3.3.2 Implementation 3.3 Country Case Brazil 4. Lessons Learned 3.3.1 Policy Formulation in Pernambuco and Ceará 3.3.2 Policy Implementation in Pernambuco and Ceará 4. Lessons Learned © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 2 When is Growth Pro-Poor? Pro-Poor Growth (relative definition) 1. Introduction 1.1 Pro-Poor Growth 1.2 Education Puzzle Pro-poor recession 2. Theoretical Framework Pro-Poor Growth 2.1 Policy Formulation (both definitions) 2.2 Policy Implementation 3. Empirical Application 3.1 Methodology 3.2 Country Case India 3.2.1 Formulation 3.2.2 Implementation 3.3 Country Case Brazil 3.3.1 Formulation 3.3.2 Implementation Anti-poor recession/ 4. Lessons Learned growth © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 3 Importance of Elementary Education for Pro-Poor Growth 1. Introduction 1.1 Pro-Poor Growth 1.2 Education Puzzle 2. Theoretical Framework 2.1 Policy Formulation 2.2 Policy Implementation 3. Empirical Application 3.1 Methodology 3.2 Country Case India 3.2.1 Formulation 3.2.2 Implementation Source: Lopez (2004) 3.3 Country Case Brazil 3.3.1 Formulation 3.3.2 Implementation 4. Lessons Learned © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 4 The “Education Puzzle”: Impact of Educational Investments on Poverty and Growth in India 1. Introduction 1.1 Pro-Poor Growth 1.2 Education Puzzle 2. Theoretical Framework 2.1 Policy Formulation 2.2 Policy Implementation 3. Empirical Application 3.1 Methodology 3.2 Country Case India 3.2.1 Formulation 3.2.2 Implementation Source: Besley, Burgess and Esteve-Volart (2005) 3.3 Country Case Brazil 3.3.1 Formulation 3.3.2 Implementation 4. Lessons Learned © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 5 The “Education Puzzle”: Impact of Educational Achievements on Poverty and Growth in India 1. Introduction 1.1 Pro-Poor Growth 1.2 Education Puzzle 2. Theoretical Framework 2.1 Policy Formulation 2.2 Policy Implementation 3. Empirical Application 3.1 Methodology 3.2 Country Case India 3.2.1 Formulation Source: Besley, Burgess and Esteve-Volart (2005) 3.2.2 Implementation 3.3 Country Case Brazil 3.3.1 Formulation 3.3.2 Implementation 4. Lessons Learned © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 6 Theoretical Framework: Possible Equilibriums in Policy Formulation 1. Introduction Reputation Financial Political Constitution Supporting 1.1 Pro-Poor Growth Capability Stability External Parties 1.2 Education Puzzle Government Clientele-Relationship with Clientele-Relationship with the Non-Poor the Poor No Political Competition Political Competition 2. Theoretical Framework Supports Bribes Ignores Supports Bribes Ignores Supports Bribes Ignores 2.1 Policy Formulation Poor Electorate Support X , X X , X X , X X , X X , X X , X X , X X , X X , X 2.2 Policy Implementation Uninformed Oppose X , X X , X X , X X , X X , X X , X X , X X , X X , X Support X , X X , X X , X X , X X , X X , X X , X X , X X , X 3. Empirical Application Informed Oppose X , X X , X X , X X , X X , X X , X X , X X , X X , X 3.1 Methodology 3.2 Country Case India Policies can ceteris paribus be expected to be formulated in a way 3.2.1 Formulation 3.2.2 Implementation that releases their pro-poor potential if: 3.3 Country Case Brazil 3.3.1 Formulation The poor are the clientele of the government 3.3.2 Implementation The government is confronted with a combination of political 4. Lessons Learned competition and a majority of poor voters well aware of the importance of the policy in question © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 7 Theoretical Framework: Possible Equilibriums in Policy Implementation Accountability Geographic, 1. Introduction Interest Groups Financial enforced by Capability Socio-economic, 1.1 Pro-Poor Growth Government etc. Conditions 1.2 Education Puzzle 2. Theoretical Framework Poor Beneficiaries No Enforcing Power Enforcing Power Unaware Aware 2.1 Policy Formulation Lobby Don’t Lobby Lobby Don’t Lobby Lobby Don’t Lobby 2.2 Policy Implementation Public Official Enforces X , X X , X X , X X , X X , X X , X Altruistic 3. Empirical Application Hampers X , X X , X X , X X , X X , X X , X 3.1 Methodology Not Enforces X , X X , X X , X X , X X , X X , X Altruistic 3.2 Country Case India Hampers X , X X , X X , X X , X X , X X , X 3.2.1 Formulation 3.2.2 Implementation Policies are ceteris paribus expected to be effectively 3.3 Country Case Brazil implemented in a certain area of influence if: 3.3.1 Formulation 3.3.2 Implementation The responsible public official has a strong commitment to 4. Lessons Learned implement The poor have enforcing power and are fully aware of it © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 8 Methodology: Case Selection 1. Introduction Responsibilities: India Brazil 1.1 Pro-Poor Growth Policy Formulation Centre, States Centre, States 1.2 Education Puzzle Policy Implementation Centre, States Centre, States, Municipalities Indicators: Andhra Pradesh Tamil Nadu Ceará Pernambuco 2. Theoretical Framework Area (sqkm) 275,045 130,058 148,825 98,911 2.1 Policy Formulation # Districts / # Municipalities 23 30 184 185 2.2 Policy Implementation Population 76,210,000 62,405,700 8,547,809 8,810,256 3. Empirical Application % SC Population 16.2% 19.0% - - 3.1 Methodology % ST Population 6.6% 1.0% - - 3.2 Country Case India SGDP (in million at current prices) Rs 3,712,000 Rs 3,392,000 R$ 60,099 R$ 70,441 3.2.1 Formulation Work participation rate 45.8 44.7 58.5 (Fortaleza) 54 (Recife) 3.2.2 Implementation NER (upper primary) 57.5 88.1 98.3 96.8 3.3 Country Case Brazil Literacy Rate 60.5 73.5 80.9 82.1 3.3.1 Formulation EDI (1st – 8th grade) 12 4 - - 3.3.2 Implementation IDEB (1st – 4th grade) - - 4.4 4.1 4. Lessons Learned © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 9 Country Case India: The Lok Sabha (Lower House) Elections 1. Introduction The political environment can be divided in two main periods: 1.1 Pro-Poor Growth Before 1989/90: Indian National Congress, party of the 1.2 Education Puzzle middle class, is uncontested dominating all elections 2. Theoretical Framework After 1989/90: Fierce competition between various parties 2.1 Policy Formulation 2.2 Policy Implementation (362 in 2009), from Communists with focus on the poor to the Bharatiya Janata Party of the upper castes 3. Empirical Application 3.1 Methodology The majority of the poor electorate seems to be politically unaware 3.2 Country Case India 3.2.1 Formulation and uninformed about the importance of elementary education: 3.2.2 Implementation 32% could not identify most pressing issues, 2% named 3.3 Country Case Brazil 3.3.1 Formulation education (National Election Survey 2009) 3.3.2 Implementation Election campaigns concentrate on food subsidies, votes of 4. Lessons Learned the poor are broadly distributed: Left Front (10.6%), INC (27.3%), BJP (16.8%) (2009) © 2011 d·i·e Rippin and Boekle-Giuffrida (2011): The Political Economy of Pro-Poor Growth 10 Country Case India: National Educational Investments over Time 4.30 1. Introduction Year of Lok Sabha Election National Democratic Alliance Lost vote of confidence (right minority coalition + weak 1.1 Pro-Poor Growth opposition) 4.10 Bharatiya Janata Party (right) 1.2 Education Puzzle Before 1989/90: (minority coalition + strong centre-left opposition) Government ignores the National Front (right-left coalition) 2. Theoretical Framework 3.90 poor, pro poor potential not Samajwadi Janata (INC supported) 2.1 Policy Formulation released 93rd Amendment (2001) National Education Policy 1992 2.2 Policy Implementation 3.70 Indian National Congress Unni Krishnan (1993) United Front (till 94 minority + strong right minority 3. Empirical Application opposition (centre-left support) 3.50 83rd Amendment (1997) 3.1 Methodology National Education Policy 1986 2% education cess (2004/05) 3.2 Country Case India 3.30 INC-led minority coalition (UPA) 3.2.1 Formulation (left support) 3.2.2 Implementation After 1989/90: Government bribes the 3.10 3.3 Country Case Brazil uninformed poor, depending on coalition 3.3.1 Formulation Indian National Congress (centre) sometimes clientele-influence, pro-poor potential 3.3.2 Implementation 2.90 not / partially released 4.