This paper critically evaluates the popular representation of rural decision making in India as guided by socio-cultural dynamics and as a resort from various social alignments. It investigates how decisions get taken about a decentralized governance scheme in rural India, what variables impact these decisions – namely, social, political, administrative or economic – and how these variables impact the scheme performance. Case studies and empirical analysis of performance of a decentralized welfare scheme in India, the Andhra Pradesh Rural Employment Guarantee Scheme (APREGS), demonstrates significant influence of agriculture-based economic dynamics and administrative efficiency factors. Local social hierarchies and cultural complexities do not come as the main concerns. These results challenge the traditional understanding of rural dynamics as totally controlled by caste hierarchies and authority of the large land owners and are discussed in the light of the institutional rational choice framework proposed by Elinor Ostrom. The results also call for a fresh and wider debate of whether India is witnessing a longer term indirect developmental outcome of empowerment which actively started in 1993 with the recognition of local governance systems (Panchayati Raj) as a formal democratic body.

This paper critically evaluates the debate on what makes local governments more effective, higher social capital (such as trust, reciprocity, and informal social networks) or stronger institutional structures (such as democratic processes, ombudsman, and social audits). Empirical analysis of a decentralized welfare scheme in India, the Andhra Pradesh Rural Employment Guarantee Scheme (APREGS), using the latent variable path analysis modeling approach reveals that creation of formal democratic institutional channels in itself does not impact governance performance. Rather, it is mediated by complex institutional and social capital issues. For example, formal information dissemination activates social capital, leading to effective local governance. However, this (higher social capital and better institutions) does not automatically lead to empowerment or trust in the local government. The influence of the economically and politically powerful mediates this relationship. These and other results, cumulatively, highlight the complexity involved in the effectiveness of government empowerment initiatives. The paper calls for a fresh and wider debate on decisionmaking dynamics in rural India, especially the interaction between government institutions, social capital, and the historical societal dynamics.

Purpose – The purpose of this paper is to provide a background to the special issue on welfare schemes in India. After 25 years of decentralization of governance and structural adjustments implemented in the 1980s and 1990s, have welfare schemes implementation and execution become more accountable and efficient? This paper seeks a critical look at the welfare schemes and its relationship with decentralization and stakeholders’ dynamics. Design/methodology/approach – The paper is based on a review of studies post 1990s. Papers representing all main stakeholders are reviewed, namely, politicians and political parties, bureaucrats, beneficiary, and civil society organizations. The inclusion/exclusion decision for the papers was taken on two criteria: the paper/document had to explicitly investigate decentralization, and had to include welfare scheme as the overall theme under which decentralization was investigated. Findings – The paper summarizes the new complexities in the system. Stakeholder behaviour is driven by several factors external to the traditional social and economic diversities that signify the Indian sub continent. For example, the authors see the lobbying process shifting to the local level, increasing importance of the local politician and the significance of forming local coalitions and partnerships for better resource allocation. Originality/value – The paper attempts to provide an overview by going beyond a critique of development to focus on the perils of operating within a socio-economically complex society.

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