IZA DP No. 3707: The Elite and the Marginalised: An Analysis of Public Spending on Mass Education in the Indian States
revised version published as 'Poverty, Elite Heterogeneity, and the Allocation of Public Spending: Panel Evidence from the Indian States' in: Review of Income and Wealth, 2012, 58 (1), 51–78
In the context of strikingly low literacy rates among Indian women and low caste population, the paper explores whether and how far the interests of the marginalized poor are undermined by the dominant elite consisting mainly of the landed and the capitalists. We distinguish the dominant elite from the minority elite (i.e., elected women and low caste representatives in the ruling government) and also the marginalised as measured by the state poverty rate. Results based on the Indian state-level data suggest that a higher share of land held by the top 5% of the population lowers public spending on education while presence of capitalist elite, as reflected in greater degree of industrialisation enhances it, even in poorer states; the landed elite thus appears to be unresponsive to the underlying poverty rate. The effect of minority representation in the government appears to have a limited impact, indicating a possibility of their non-accountability to serve their cohorts and/or a possible alliance with the dominant elite.