Local governments lack resources to tackle Covid-19

Rohini Pandeis Professor of Economics and Director of the Economic Growth Center (EGC) at Yale University. She was Professor of Public Policy at Harvard Kennedy School and Co-Director of Evidence for Policy Design (EPoD).  A respected economist, she is interested in the role of public policy in providing the poor and disadvantaged greater political and economic power, and has been involved in Nepal-based research work since 2017.

Pande spoke to Nepali Times about EGC/Nepal Administrative Staff College’s recently released Covid-19 and Nepal’s Health Financing study aimed at understanding health activity financing during pandemic, along with her research in other policy areas including employment and federalism.

Nepali Times: Could you give us a quick overview of your work in Nepal? 

Rohini Pande: For the last few years, I have been working with my US-based colleagues as well as the Kathmandu-based Governance Lab and Daayitwa on trying to understand how federalism is working. A particular area of interest to us is to understand how the move to federalism has enabled inclusion in the three spheres of government; recognizing that the demand for inclusion was an important reason underlying the prior conflict and that the Constitution gave this goal priority.

Once Covid-19 hit, a question that naturally came to the fore is how well the three spheres of government are coordinating in their response. This is especially important given that local governments are in the frontline but don’t directly have access to additional resources beyond their local budget. So we have been conducting a series of phone surveys with officials in both local and provincial governments to better understand the coordination challenges and financing issues that have come up during the pandemic.

Could you talk about the results, and the policy lessons?

Covid-19 has brought to the fore the absolute importance of ensuring that adequate resources are being dedicated to frontline health activities. There is only so far you can go with across-the-board policies like lockdowns, and you have to move to policies such as quarantining a smaller number of people, contact tracing and testing activities. Many of these activities remain split across the three spheres of Government. Quarantine facilities, for example, are managed by local governments but funded from higher-level governments.  We were interested in understanding exactly how well the financing for different activities under Covid-19 match up with where the responsibilities are.

We had two main findings. First, in the short run, during the lockdown, local governments typically said that lack of resources was a big issue. This was particularly true for municipalities in the Tarai and those bordering India where they saw more returnees requiring quarantine facilities. The Tarai also has fewer remaining disaster relief funds, as much of it was spent on flood relief efforts earlier in the financial year. So essentially, local government budgets did not reflect their caseload. We argue that this creates a case for needs-based financing.

This brought us to the next question: if we wanted to move towards a need-based financing approach, how well would this work? This requires flow of data across spheres of government – which currently occurs through then CMIS data system. We observe that CMIS data entry is patchy for several local governments pointing to a need to complement rollout of new software with providing local governments the personnel and hardware necessary for data entry. This is an area where we want to see more investments to make evidence-based financing systems viable, and the government officials we have been talking to have been responsive.

I also want to flag a recent World Bank report on health financing that suggests very low overall health spending by Nepal. So, it is not just about how to allocate the small set of resources better as we discussed, but the total amount of resources allocated on health needs to be increased as well.

With festivals around the corner, how do we prepare for the upcoming months?

Ensuring ongoing public health awareness campaigns and requiring social distancing is, of course, important. The extent to which local governments can actually limit indoor events and implement crowd-size control measures will be important, as more and more studies show that super-spreading events are a key factor. The harder task is to continue to intensify the levels of both testing and contact tracing.

Given your work with MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) in India what have been the lessons, and how can data and evidence help with implementation?

The value of a program like MGNREGA becomes clear especially during times like this, as it is the largest social safety net available to individuals across rural India when overall private sector employment is falling.

From the very start, MGNREGA placed a lot of emphasis on transparency, so there are clear websites where you see data, down to the level of local government, on how employment is progressing. My one suggestion would be that as PMEP is being rolled out, it would be valuable to have a strong Management Information System from the beginning as a backing. When MGNREGA started, there were concerns about a significant amount of corruption. To the extent that researchers and the policy community were able to triangulate data across different sources including the MIS, we have strong reasons to believe that corruption levels over time has decreased significantly over the 15 years. So, for evidence such as that, a strong MIS is valuable.

The other aspect that Indian states are also wrestling with is knowing how much demand for employment in MGREGA there actually is on the part of local citizens. The reality is programs like MGNREGA and PMEP tend to be more supply-driven rather than demand-driven, when in theory, these projects are meant to be demand-driven. Thinking upfront how you plan to register local demand is going to be crucial.

In terms of my research, we have looked at the digital architecture of MGNREGA and the extent to which the transition to electronic payment systems has improved the funds flow. We just published some work arguing that with digital payments, it is possible to have greater transparency on who is getting paid and that can reduce corruption.

We have also been doing work on how the programs can be strengthened to reach women. This is also important in the Nepal context today because COVID-19 has had a disproportionate impact on women worldwide. So, the extent to which programs like PMEP can be used not just to provide households with employment but to also ensure its equal access to men and women is important. This would also involve combining PMEP-style programs with financial inclusion efforts because ensuring women’s wages are directly deposited into their individually controlled bank accounts that are secure will be valuable.

Your other area of work is economic empowerment of women. Women’s participation in paid jobs is low whether within Nepal or overseas. What is the available evidence on policy interventions to increase women’s labour force participation?

Raising overall labour force is important but right now, with decline in economic opportunities globally, a bigger question is what can be done to keep those in the labour force employed, and to bring those who lose the jobs back to it. These are the groups closely tied to the labour market and currently threatened.  Carefully tracking the rates at which women are losing jobs compared to men, ensuring employers face incentives to equally employ men and women, and that women also have access to information on employment opportunities is important.

As a parting question, what is your overall experience working in Nepal been like as you try to inculcate a wider appreciation for evidence-based work? What could media’s role be?

We have been lucky as we are working with colleagues in the Government who are genuinely interested in understanding what is in the data. Our survey work is being done in collaboration with the Nepal Administrative Staff College and our previous work was also jointly done with Government officials. Since there is already interest in what is in the data, the main issue really is to create the infrastructure.

The extent to which media can also start investing in more data-based stories, which may require recruiting individuals who can conduct such data analyses or partnering with organizations with strong databases to write more columns involving data can be valuable.