Evaluation of Social Sector Expenditures and Application of the Theory of Change to Enhance Good Governance in Jammu and Kashmir

Jammu and Kashmir (J&K), now a Union Territory (UT) post-August 2019, presents a unique laboratory for studying the relationship between conflict, governance and social sector public expenditure. This article makes a tripartite contribution to the relevant literature: first, it empirically analyses trends in social sector expenditure as a percentage of Gross State Domestic Product (GSDP) from 1995 to 2022 using an autoregressive distributed lag bounds testing approach, stratified across three politically defined phases: the Peak Militancy Period (1990–2002), the Mass Protest Years (2002–2018) and the Post-Reorganisation Phase (2019 onwards). Second, it provides a comprehensive inter-regional comparison between the J&K divisions, supplemented by a systematic inter-district analysis using the socio-economic development index and health infrastructure index, revealing that while expenditure allocations have historically favoured the Kashmir division, developmental outcomes are paradoxically superior in the Jammu division, a finding attributable to differential institutional capacities in conflict-affected versus relatively peaceful geographies. Third, the article critically evaluates five competing evaluation frameworks—cost–benefit analysis, cost-effectiveness analysis, cost–utility analysis, cost–consequence analysis and multi-criteria decision analysis—and provides reasoned justification for selecting the theory of change (ToC) model as the most appropriate analytical approach for J&K’s multi-sector, district-level governance challenge operationalised through the district good governance index (DGGI). The study finds that social sector expenditure has persistently remained below 3 per cent of GSDP across all phases, with a structural bias towards economic sector expenditure, and argues that the ToC model embedded within the DGGI framework offers a replicable, conflict-sensitive evaluation architecture for governance reform in post-conflict societies.