Centre for Development Economics
Department of Economics
Delhi School of Economics
ANNOUNCE A SEMINAR
Decentralization and Spatial (Mis-)Allocation
of Irrigation Water
by
Souvik Dutta
(Indraprastha Institute of Information Technology, Delhi)
Thursday, 22 September 2022 at 3:15 to 4:30 PM IST
Venue: AMEX room
Abstract:-
This paper examines, both theoretically and empirically, the consequence of decentralization in the management of canal irrigation for spatial allocation of water and agricultural performance. Under centralized provision and monitoring, farmers closer to the canal over-extract water, generating inefficiency. Decentralization of monitoring improves audit capacity of (local) government and consequently, farmers farthern away from canal are more likely to get water. We empirically validate the predictions by exploiting staggered constitution of locally elected canal management bodies (“Pani Panchayats”) in the state of Orissa, India. Using survey data and a heterogeneous treatment effect estimation strategy using farmer level fixed effects, we show that farming plots farther away from canal received less water under centralized system, but greater exposure to decentralization significantly reduces spatial mis-allocation. Consequently, agricultural revenue and wealth (land-holding) improve more for those farmers. We find that distant farmers’ ability to complain to local representatives is an important mechanism explaining our results..