Caste system in India influences provisioning of public goods as well

Sociology Syllabus: Caste in India.

• Why do some Indian villages have better roads than others? One explanation could be diversity. In 1965, American economist and social scientist Mancur Olson famously argued that diverse societies result in different groups competing for the same public resources. Since then, research in India has shown that the provision of public goods is lower in areas with higher diversity because heterogeneous societies find it hard to agree on the public goods that would benefit everyone.
• However, a new working paper by Naveen Bharathi of the Indian Institute of Management, Bangalore, and others, suggests that this is an incomplete explanation. They argue that beyond diversity, caste segregation and caste hierarchies affect public good provisioning. Village-level public goods are not just impacted by village-level diversity, but also by diversity and segregation in the sub-district, district and province that contain the village.
• To show this, the authors analyse data from the 2011 census of India, containing caste information for 830 million rural Indians from 600,000 villages and details of 25 different public goods, including schools, roads and health centers.
• They find that, at the village-level, caste diversity has a positive effect on most public goods (apart from secondary schools and health facilities), while concentration of castes (segregation) has a largely negative effect. However, both these effects change once hierarchy is accounted for. For instance, in villages where Scheduled Caste and Scheduled Tribes are dominant, but upper-castes dominate sub-districts (the tier above villages), less public goods are provided. Conversely, when there are more upper-castes at villages, public goods are higher, regardless of the group dominating at the sub-district.
• Taken together, the authors conclude that caste diversity, segregation and hierarchy are three distinct channels that come together to influence public goods provision. And in doing so, they once again highlight the profound and complex impact caste has on Indian society.