Targeting public goods to the poor in a segregated economy: An empirical analysis of central mandates in rural India

While local governments are increasingly being vested with control over funds for public goods, concern over the capture of decentralized funds by local elites has led decentralization to be combined with central mandates which require a certain proportion of funds to directly benefit the poor. If local capture is pervasive, however, central mandates may not be effective. Despite the popularity of this combination of decentralization and centralized control, there is little empirical evidence which separately identifies their effect on investment in public goods, and hence assesses the effectiveness of central mandates. This paper provides such evidence, using data collected by the authors for the North Indian state of Punjab, an economy where economic conditions facilitate such an analysis. We find that central mandates are effective, enhancing intra-village equality in expenditure on public goods. This finding informs the debate on the equity effects of centralized versus decentralized programs.     

Confidence Distribution,the Frequentist Distribution Estimator of a Parameter: A Review

In frequentist inference, we commonly use a single point (point estimator) or an interval (confidence interval/“interval estimator”) to estimate a parameter of interest. A very simple question is: Can we also use a distribution function (“distribution estimator”) to estimate a parameter of interest in frequentist inference in the style of a Bayesian posterior? The answer is affirmative, and confidence distribution is a natural choice of such a “distribution estimator”. The concept of a confidence distribution has a long history, and its interpretation has long been fused with fiducial inference. Historically, it has been misconstrued as a fiducial concept, and has not been fully developed in the frequentist framework. In recent years, confidence distribution has attracted a surge of renewed attention, and several developments have highlighted its promising potential as an effective inferential tool. This article reviews recent developments of confidence distributions, along with a modern definition and interpretation of the concept. It includes distributional inference based on confidence distributions and its extensions, optimality issues and their applications. Based on the new developments, the concept of a confidence distribution subsumes and unifies a wide range of examples, from regular parametric (fiducial distribution) examples to bootstrap distributions, significance (p‐value) functions, normalized likelihood functions, and, in some cases, Bayesian priors and posteriors. The discussion is entirely within the school of frequentist inference, with emphasis on applications providing useful statistical inference tools for problems where frequentist methods with good properties were previously unavailable or could not be easily obtained. Although it also draws attention to some of the differences and similarities among frequentist, fiducial and Bayesian approaches, the review is not intended to re‐open the philosophical debate that has lasted more than two hundred years. On the contrary, it is hoped that the article will help bridge the gaps between these different statistical procedures.     

Economic transition,dualism and informality in India: Nature and patterns of household-level transitions

We examine the Indian economy during a peak period of high growth between 2005 and 2012 to analyse the nature and patterns of household-level transitions across different sectors, characterised by varying degrees of formality/informality and various production structures and labour processes. We find that even within this brief period, there has been a huge volume of household-level transitions across sectors. However, the overall economic structure, and its segmentations, has continued to be reproduced, along with a regeneration of ‘traditional’ non-capitalist informal spaces. To ascertain the nature of household-level transitions in terms of economic well-being, we employ a counterfactual analysis. We find that majority of transitions in the economy have been ‘unfavourable’ in nature, with large proportion of households undergoing sectoral transitions that are not optimal for them, given their socio-economic characteristics. Furthermore, the likelihood of ‘favourable’ versus ‘unfavourable’ sectoral transition, on average, significantly varies with household characteristics, some of which, like social caste, are structurally given and cannot be optimally chosen by households. Drawing upon this analysis, we reflect on the competing strands of literature that seek to explain the persistence of informality. Our analysis highlights the complexity of India's contemporary development trajectory, whereby the pre-existing economic structure is reproduced, paradoxically, through a continuous reshuffling and reconstitution of economic spaces, accompanied by significant volume of ‘unfavourable’ household-level sectoral transitions.