Cooperation and Public Goods in Rural India

How are the quality and accessibility of local public goods influenced by grassroots efforts such as SHGs? Desai et al. (2014) explored this question in Rajasthan, India looking at water access and found that women in villages with SHGs were more informed than those in control villages about how to address problems of water supply and deficiency. They were also more likely to contact local authorities regarding their grievances with respect to water service and also reported greater improvements in water access, quality and infrastructure compared to their counterparts in control villages. Desai et al. also used public good games with about 200 participants in 14 villages to determine whether SHGs foster norms of cooperation and collective action, both key to improving public service provision. The results here were also encouraging: in the first round of the game, SHG members contributed more than non-members in treatment villages, but in the second round non-members increased contributions to match those of the SHG members. By the end of the game, both members and non-members were contributing the same amount; the main difference after the first round was between residents of treatment and control villages. This showed that the SHGs themselves increase coordination and trust among communities, building social capital to improve public good provision.   

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