1. Institutional Competition and Governance QualityExperimental Evidence from AfghanistanAndrew BeathFotini ChristiaRuben Enikolopov

2. Motivation} Longstanding academic inquiry on the relationship betweeninstitutions and economic and political development.} Presumed but largely unproven causal effect of specific politicalinstitutions.} In particular, does the creation of representative institutionsproduce more equitable policy outcomes and reduces corruption?} Use a randomized field experiment to assess whetherdemocratically elected local institutions improve quality ofgovernance 3. Intervention} Part of the bigger project based on impact evaluation of NationalSolidarity Programme in Afghanistan} Creation of democratically elected village councils} Food aid distribution as an example of a task performed by localleaders which is} Relevant} Measureable} Comparable across villages} Outcomes of interest:} the quality of targeting} the extent of corruption 4. Hypotheses TargetingH1: Democratically Elected Institutions lead to improved ObjectiveTargetingH2: Democratically Elected Institutions lead to improved SubjectiveTargeting Elite CaptureH3: Democratically Elected Institutions lead to a decrease inEmbezzlementH4: Democratically Elected Institutions lead to a decrease in NepotismParticipationH5: Democratically Elected Institutions lead to an increase inParticipation 5. Treatment} The National Solidarity Program (NSP) is the largestdevelopment program in Afghanistan.} Over 29,000 of Afghanistans 38,000 villages have received NSP.} Sponsored by international donors and run by the Ministry ofRural Rehabilitation and Development.} Implemented by NGOs in two main stages:} Election of Community Development Councils (CDCs)through secret-ballot election} Size of CDC proportional to size of community with equalnumber of males and females.} Project Selection} $200 per household; max community grant $60,000 6. Balkh BaghlanHeratGhor NangarharDaykundi500 villages across 10 districts in 6 provinces.Cluster Matched-Pair used to assign villages to control and treatment. 7. Customary structure: Headman; Tribal Elders; and Clergy; Purdah precludes female participation; Democratic councils exist in parallel to customary structures Official responsibilities limited to managing development projects But in some cases they assume responsibilities for conflict resolution etc. Some overlap between customary leaders and elected members: 40% of elected members identified as village leaders ex ante elected members are on average younger and better educated. 8. In partnership with WFP, 725 mt. of wheat distributed across sample in fall 20111st Visit: Local leaders informed of distribution and asked to prepare list of recipients;2nd Visit:Food aid delivered by WFP; recipient list retrieved;3rd Visit: Male and female surveys administered: (i) random sample of village households; (ii) listed recipients; (iii) unlisted recipients; Data collected on wheat distribution (process and amounts) as well as recipient and non-recipient characteristics 9. Mechanisms} Democratically elected gender balanced councils can affectdistribution outcomes through different channels:} 1) Direct Effect: Council assumes responsibility of distribution.} 2) Indirect Effect: Council affects distribution by affecting thebehavior of customary village leaders in those villages that now alsohave elected councils.} 3)The results of the aid distribution can be affected by higherfemale involvement in the distribution. 10. To get at underlying mechanisms, we vary the identity of people responsible for the food aid distribution.Sample (500 Villages)Democratic Council No Democratic Council(250 Villages) (250 Villages)Council Distributes Leaders Distribute Leaders Distribute Leaders & Women Distribute (125 Villages)(125 Villages) (125 Villages)(125 Villages)Effect of Creating & Designating Democratic CouncilsEffect of Involving Women Effect of Creating Democratic Councils 11. Council Exists Council Manages Women Involved inOutcomes Obs.(But Not Delegated)DistributionDistribution Objective Targeting (H1)Asset Ownership of Food Aid Recipients -0.043[0.096]-0.023 [0.097] -0.025[0.094] 8,159Whether Food Aid Recipients Belong to Vulnerable Group -0.003[0.020] 0.054** [0.024]0.006[0.021] 8,767Omnibus Measure of Need0.0299[0.143] -0.1611 [0.121]-0.0303[0.116] 7,170Mean Effect Index for H10.001 0.062*0.044 Subjective Targeting (H2)Share of respondents mentioning recipient as vulnerable ex-ante 0.002[0.003]-0.001 [0.002]0.002[0.003] 3,262Proportion of Recipients Reported as Vulnerable Ex-Post-0.008[0.013]-0.013 [0.008]-0.025** [0.012] 5,966Distribution Primarily Benefited Vulnerable Households -0.083[0.105]0.188* [0.100]0.001[0.143] 6,345Mean Effect Index for H2 -0.002 -0.003 -0.013 Embezzlement (H3)Wheat Retained by Village Leaders0.038*[0.020]-0.011 [0.020]0.053**[0.024] 6,112Some Wheat was Sold by Village Leaders0.006[0.012] 0.013 [0.008]0.026**[0.011] 6,968Wheat Revoked by Village Leader safter Distribution-0.009[0.012]-0.016 [0.010] -0.022[0.014] 5,620Difference btw. Amount Allocated and Amount Received5.653**[2.529] 0.155 [2.259] 5.312*[2.838] 3,803Mean Effect Index for H3-0.099*0.008-0.105*Nepotism (H4)Proportion of Recipients Connected to Village Leaders, Self-Identified0.004[0.032]-0.030 [0.027] -0.013[0.028] 0.004Proportion of Recipients Connected to Village Leaders, Reported-0.020[0.033] 0.045 [0.035]0.030[0.046] 5,993Distribution Primarily Benefited Connected Households 0.024[0.016]-0.013 [0.014]0.004[0.019] 7,049Non-Decision-Making Local Leader(s) Received Wheat -0.008[0.013]-0.008 [0.013] -0.015[0.015] 6,531Mean Effect Index for H4 (Listed Recipients) -0.0220.005 -0.010Process (H5)Decision Made by Multiple People -0.012[0.028] 0.031 [0.019] -0.007[0.027] 13,011Ordinary Villagers Participated in Decision Making Process -0.113**[0.044] 0.008 [0.036]-0.090*[0.046] 10,440Number of People (ln) Involved in Decision-Making Process-0.139**[0.060]0.120**[0.051] -0.039[0.072] 12,317Respondent Involved in Decision-Making Process -0.032**[0.012] 0.018 [0.015] -0.016[0.014] 15,980Women Involved in Decision-Making Process-0.004[0.010] 0.005 [0.010]0.001[0.012] 14,549No Conflicts Related to Wheat Distribution0.000[0.009] -0.019*** [0.006] -0.006[0.008] 13,415Decision Publicly Announced 0.028[0.031] 0.019 [0.024]0.014[0.039] 13,570Mean Effect Index for H5-0.066*0.046 -0.015 12. Council Exists Council Manages Women Involved inOutcomes Obs.(But Not Delegated)DistributionDistribution Objective Targeting (H1)Asset Ownership of Food Aid Recipients -0.043[0.096]-0.023 [0.097] -0.025[0.094] 8,159Whether Food Aid Recipients Belong to Vulnerable Group -0.003[0.020] 0.054** [0.024]0.006[0.021] 8,767Omnibus Measure of Need0.0299[0.143] -0.1611 [0.121]-0.0303[0.116] 7,170Mean Effect Index for H10.001 0.062*0.044 Subjective Targeting (H2)Share of respondents mentioning recipient as vulnerable ex-ante 0.002[0.003]-0.001 [0.002]0.002[0.003] 3,262Proportion of Recipients Reported as Vulnerable Ex-Post-0.008[0.013]-0.013 [0.008]-0.025** [0.012] 5,966Distribution Primarily Benefited Vulnerable Households -0.083[0.105]0.188* [0.100]0.001[0.143] 6,345Mean Effect Index for H2 -0.002 -0.003 -0.013 Embezzlement (H3)Wheat Retained by Village Leaders0.038*[0.020]-0.011 [0.020]0.053**[0.024] 6,112Some Wheat was Sold by Village Leaders0.006[0.012] 0.013 [0.008]0.026**[0.011] 6,968Wheat Revoked by Village Leaders after Distribution-0.009[0.012]-0.016 [0.010] -0.022[0.014] 5,620Difference btw. Amount Allocated and Amount Received5.653**[2.529] 0.155 [2.259] 5.312*[2.838] 3,803Mean Effect Index for H3-0.099*0.008-0.105*Nepotism (H4)Proportion of Recipients Connected to Village Leaders, Self-Identified0.004[0.032]-0.030 [0.027] -0.013[0.028] 0.004Proportion of Recipients Connected to Village Leaders, Reported-0.020[0.033] 0.045 [0.035]0.030[0.046] 5,993Distribution Primarily Benefited Connected Households 0.024[0.016]-0.013 [0.014]0.004[0.019] 7,049Non-Decision-Making Local Leader(s) Received Wheat -0.008[0.013]-0.008 [0.013] -0.015[0.015] 6,531Mean Effect Index for H4 (Listed Recipients) -0.0220.005 -0.010Process (H5)Decision Made by Multiple People -0.012[0.028] 0.031 [0.019] -0.007[0.027] 13,011Ordinary Villagers Participated in Decision Making Process -0.113**[0.044] 0.008 [0.036]-0.090*[0.046] 10,440Number of People (ln) Involved in Decision-Making Process-0.139**[0.060]0.120**[0.051] -0.039[0.072] 12,317Respondent Involved in Decision-Making Process -0.032**[0.012] 0.018 [0.015] -0.016[0.014] 15,980Women Involved in Decision-Making Process-0.004[0.010] 0.005 [0.010]0.001[0.012] 14,549No Conflicts Related to Wheat Distribution0.000[0.009] -0.019*** [0.006] -0.006[0.008] 13,415Decision Publicly Announced 0.028[0.031] 0.019 [0.024]0.014[0.039] 13,570Mean Effect Index for H5 -0.066* 0.046 -0.015 13. Council Exists Council Manages Women Involved inOutcomes Obs.(But Not Delegated)DistributionDistribution Objective Targeting (H1)Asset Ownership of Food Aid Recipients -0.043[0.096]-0.023 [0.097] -0.025[0.094] 8,159Whether Food Aid Recipients Belong to Vulnerable Group -0.003[0.020] 0.054** [0.024]0.006[0.021] 8,767Omnibus Measure of Need0.0299[0.143] -0.1611 [0.121]-0.0303[0.116] 7,170Mean Effect Index for H10.001 0.062*0.044 Subjective Targeting (H2)Share of respondents mentioning recipient as vulnerable ex-ante 0.002[0.003]-0.001 [0.002]0.002[0.003] 3,262Proportion of Recipients Reported as Vulnerable Ex-Post-0.008[0.013]-0.013 [0.008]-0.025** [0.012] 5,966Distribution Primarily Benefited Vulnerable Households -0.083[0.105]0.188* [0.100]0.001[0.143] 6,345Mean Effect Index for H2 -0.002 -0.003 -0.013 Embezzlement (H3)Wheat Retained by Village Leaders0.038*[0.020]-0.011 [0.020]0.053**[0.024] 6,112Some Wheat was Sold by Village Leaders0.006[0.012] 0.013 [0.008]0.026**[0.011] 6,968Wheat Revoked by Village Leaders after Distribution-0.009[0.012]-0.016 [0.010] -0.022[0.014] 5,620Difference btw. Amount Allocated and Amount Received5.653**[2.529] 0.155 [2.259] 5.312*[2.838] 3,803Mean Effect Index for H3-0.099*0.008-0.105*Nepotism (H4)Proportion of Recipients Connected to Village Leaders, Self-Identified0.004[0.032]-0.030 [0.027] -0.013[0.028] 0.004Proportion of Recipients Connected to Village Leaders, Reported-0.020[0.033] 0.045 [0.035]0.030[0.046] 5,993Distribution Primarily Benefited Connected Households 0.024[0.016]-0.013 [0.014]0.004[0.019] 7,049Non-Decision-Making Local Leader(s) Received Wheat -0.008[0.013]-0.008 [0.013] -0.015[0.015] 6,531Mean Effect Index for H4 (Listed Recipients) -0.0220.005 -0.010Process (H5)Decision Made by Multiple People -0.012[0.028] 0.031 [0.019] -0.007[0.027] 13,011Ordinary Villagers Participated in Decision Making Process -0.113**[0.044] 0.008 [0.036]-0.090*[0.046] 10,440Number of People (ln) Involved in Decision-Making Process-0.139**[0.060]0.120**[0.051] -0.039[0.072] 12,317Respondent Involved in Decision-Making Process -0.032**[0.012] 0.018 [0.015] -0.016[0.014] 15,980Women Involved in Decision-Making Process-0.004[0.010] 0.005 [0.010]0.001[0.012] 14,549No Conflicts Related to Wheat Distribution0.000[0.009] -0.019*** [0.006] -0.006[0.008] 13,415Decision Publicly Announced 0.028[0.031] 0.019 [0.024]0.014[0.039] 13,570Mean Effect Index for H5 -0.066* 0.046 -0.015 14. Summary of Findings} Differential effect of democratically elected institutions} When in the lead - better targeting of aid} When in competition with traditional elite structures - higher levelsof embezzlement, and lower levels of participation.} Institutional competition is also at play when we mandate femaleparticipation.} Creation of multiple institutional structures with no clear divisionof responsibilities can lead to institutional competition andunderperformance rather than to additional checks and balancesthat enhance efficiency.