The Cost Of Distance: Geography And Governance In Rural India
Speaker(s) Mr. Karan Nagpal, PhD Candidate, Oxford University Publication Conference room No. 1, 15th floor, Central Office Building, Reserve Bank of India

Increasing the effectiveness of the state is a major challenge facing most developing countries today. In this paper, we focus on one important factor that constrains the state's ability to provide public goods to all citizens: citizens' physical remoteness from their administrators. Using rich data on village India, and a spatial regression discontinuity design, we show that greater distance to administration reduces a village's access to public goods and worsens welfare. Villages that are more remote from their administrators have fewer roads, schools, health centers and less irrigation. In turn, their residents have fewer assets, less literacy and are more likely to be employed in agriculture. At least for roads, these effects are not driven by the higher cost of construction in remote villages, but higher cost of monitoring road quality. Our results suggest that reducing the distance between the state and its citizens can help to mitigate the large spatial disparities in living standards observed within many developing countries.

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