Multidimensional Poverty and Quality of Governance in Indian States

This study analyses the role of the quality of governance in poverty reduction while looking at the experiences of different states in India in terms of multidimensional poverty over the period 2001–2016. Controlling for the average income of the state and other state-specific factors, the study finds that the quality of governance is statistically significant in all the estimated equations. Our results clearly indicate that better-performing states with respect to governance have also performed better in terms of poverty reduction. The relationship between the quality of governance and poverty incidence remains significant even when we consider different dimensions of deprivation. This study contributes to the scant literature addressing the question of the importance of quality governance to reduce poverty. JEL Codes: O10, O150, O170