Rethinking Federalism: Changing Power Relations Between the Center and the States

India's federalism during the last 50 years had two phases:three decades of centralized federalism followed by cooperativeand competitive federalism. Unitary features of India's Constitutionand planned development led to strong central dominance in thefirst phase, with the states in a subordinate position. Themomentum of impressive initial growth did not last. The late1970s saw a weakened Congress party, the emergence of coalitionpolitics, and a shift in the Center-states power balance. Growthfollowed liberalization and moves toward decentralization, butthis was accompanied by an accentuation of regional disparitiesand fiscal imbalances. A major factor in the negative resultshas been weaknesses in the intergovernmental transfer system.Desirable reforms, which maintain moves toward decentralizationand greater states' autonomy, are explored here.     

Fertility and the household's economic status: A natural experiment using Indian micro data

We model fertility as endogenous to the family's economic status because poor households choose to have large families in the absence of adequate social insurance. Because of a strong son preference in India, having two girls first can proxy an exogenous increase in fertility, and is therefore a good instrument for fertility in determining poverty of rural households. The 1993–1994 Indian Quinquennial Survey data shows that even though poverty rates are comparable, 74 per cent of two-girl families have a third child compared to 63 per cent of other families. Fertility significantly positively affects poverty when treated as exogenous, but vanishes once endogenised. These results are robust to omitting states with skewed sex ratios and to proxying economic status by expenditures.