Can the poor organize? Public goods and self-help groups in rural India

Abstract

In many low- and middle-income countries, the quality of public goods available to the poor is inadequate. We report findings from a unique combination of a village-randomized controlled trial and a lab-in-the-field behavioral experiment involving the establishment of “self-help” groups in one of the poorest districts in India. The presence of these groups improved villagers' access to and quality of certain critical local public goods, in particular, water. Our evidence suggests that the underlying mechanisms responsible were better information provision through the groups, stronger engagement by members in village governance, and lower coordination costs. Public goods games played in a subset of control and treatment villages four years following the start of the intervention, additionally, indicate that cooperative norms are stronger in villages where self-help groups were present. We find little evidence that membership leads to a convergence of tastes among group members. These results suggest that, in contrast to traditional participatory development programs, self-help groups can build durable social capital that can improve government performance in poor communities.