The Impact of Decentralization on Economic Development in India

Abstract: A common occurrence in India, district splitting is said to lead to better developmental outcomes because it creates a population that is more homogenous and closer to its administrative unit. However, this relationship requires examination and to explore the effects of district splitting a difference in discontinuities approach is used with data from Washim, Karnataka, where differences-in-differences and regression discontinuities are combined to assess the change in night-light data, as it is a suitable proximity measure for economic growth, as well as the change in the number of schools per capita at the village level. It has been found that district splitting has little effect on economic growth. However, over time this trend may change because it has also been found that district splitting increases the number of schools per capita, which in the long term may lead to a more skilled and knowledgeable population that will result in economic growth.