How political regime affects pro-poor social policies

Research links democratic political regimes with expanded social policies (Dorlach Reference Dorlach2021; Lavers & Hickey, Reference Lavers and Hickey2021). Indeed, scholars contend that “democratisation processes have strengthened the political voice and influence of low-income groups” and “shaped effective demand for policies addressing poverty and vulnerability” (Barrientos, Reference Barrientos2013, p. 11). In democratic regimes, the freedom of association enables the poor, and groups representing the poor, to organise for change that favours their interests (Ganz, Reference Ganz2009; Pribble, Reference Pribble2011). The freedom of speech allows these groups to express their grievances and exert pressure on political leaders. They use a variety of strategies, including the framing of demands (Díez, Reference Díez2013) and protests such as roadblocks, demonstrations, and occupations of buildings (Garay, Reference Garay2007) to legally voice their discontent and elicit government action. These freedoms strengthen the political influence of low-income groups, increasing the likelihood that a government introduces policies that meet their needs.

At the same time, electoral competition creates incentives for political elites to respond to the demands of the poor. Politicians have sought to achieve electoral gains by strategically introducing social policies, such as universal healthcare coverage, that serve the needs of low-income groups (Aspinall, Reference Aspinall2014).

However, democratic regimes are not the only political systems which have expanded pro-poor social policies. Research has investigated the origins of social assistance (Leisering, Reference Leisering2008) and shown that an overwhelming number of social insurance programs were initially adopted by authoritarian governments (Mares & Carnes, Reference Mares and Carnes2009). Indeed, scholars have documented how some of the world’s most redistributive regimes have been authoritarian (Albertus, Fenner, & Slater, Reference Albertus, Fenner and Slater2018). If the poor do not have the right to organise and express their grievances, and are unable to participate in a competitive electoral process, then why would authoritarian regimes distribute beyond their closest political allies? Put another way, what is the political logic that underpins the expansion of social policies serving the poor?

To remain in power, authoritarian regimes can use strategies of co-optation, providing social benefits to neutralise potential threats and maintain political control. For example, these regimes have responded to the threat of rebellion by expanding social policies to groups that threaten social stability (Chen et al., Reference Chen, Pan and Xu2016). Often, this is done in response to the demands of labour, which has historically had the most political and bargaining force (Rudra & Haggard, Reference Rudra and Haggard2005). Social policies have therefore been used to buy peace and pre-empt social unrest.

Drawing on the literature on historical institutionalism, we argue that social and economic crises can act as a critical juncture (Capoccia and Kelemen, Reference Capoccia and Kelemen2007, p. 343). These crises can trigger social mobilisation which, in turn, threatens a government’s political survival. For example, social mobilisation can undermine popular confidence in government and threaten its legitimacy. In other contexts, it can cause violence and disorder and subsequently disrupt a host of critical economic activities. Increasingly many countries are characterised by a political climate where “the poor have gained political predominance as the main grassroots source of political threat” (Yoruk, Reference Yoruk2022, p. 3). Therefore, governments have strong incentives to manage social unrest amongst the poor, as the failure to do so could threaten their political power.

In democratic systems, governments are obligated to permit social mobilisation, as this is a core civil liberty. Public discontent is therefore funnelled through the electoral process, where incumbent governments must adequately respond to continue in office. Political parties that are viewed as responding to citizens’ demands are rewarded with access to office. The goal, then, is to use social policies to win elections. By contrast, authoritarian political systems limit civil liberties and electoral competition. These governments use social policies to maintain political control, targeting those who could potentially cause unrest. Therefore, governments, regardless of regime type, expand social policies in response to social mobilisation or the threat of social mobilisation. Social policies are, in effect, “one tool within the broader political survival strategies employed by ruling elites to maintain power” (Lavers & Hickey, Reference Lavers and Hickey2021, p. 2).

Once introduced, the implementation of pro-poor policies can be influenced by a government’s political calculations, rather than the needs of the poor. For instance, in democratic regimes, governments may allocate social assistance based on party affiliation, rather than financial need, in order to maintain electoral support. Without strong systems of accountability, democracies can fail to effectively implement pro-poor policies. Similarly, in authoritarian regimes, governments may provide social assistance to individuals deemed to be political threats, rather than those solely experiencing poverty, to pre-empt social unrest. In both regimes, then, we see the expansion of pro-poor social policies, but also the underprovision of government assistance for the poor.

Mobilising for change: the role of civil society

In the late 1990s and early 2000s, severe droughts affected the Indian state of Rajasthan. Grassroots organisations, such as the MKSS, formed to defend the rights of those affected. They argued that the government was not effectively implementing drought relief programs, pointing to some 50 metric tons of food grains that sat in government warehouses throughout India (Jenkins & Manor, Reference Jenkins and Manor2017). In 2001, a coalition of activist groups filed a Public Interest Litigation at the Supreme Court, claiming that state governments were violating the Indian Constitution. The government’s inability to implement existing food and nutrition programs violated the right to life. They also began to call on the government to uphold a right to employment, which they saw as central to ensuring the right to food.

In May 2001, the Supreme Court issued an interim order requiring state governments to change how they fulfilled the “right to food,” which it stated was central to the “right to life” (Jenkins and Manor Reference Jenkins and Manor2017, p. 38). A set of court-appointed commissioners was created and responsible for supervising all nutrition-related programs throughout the country. The mobilising efforts of grassroots organisations had therefore succeeded in putting the issue on to the Indian government’s agenda.

Introducing NREGA: electoral and party politics

The role of democratic politics can be classified into two categories: non-party and party politics (Khera, Reference Khera2013). Non-party politics – the activism of social movements, people’s campaigns, and NGOs – played an important role in drawing initial attention to the right to work. In addition, party politics during the 2004 election cycle was instrumental in ensuring the ultimate passage of NREGA. There are several ways in which political parties in India have developed strategies to achieve electoral success: the use of Hindu nationalism, caste politics, political dynasties, and the emergence of demagogues as leaders (Kohli, Reference Kohli2012). In the case of NREGA, Sonia Gandhi, the national president of the Congress Party, sought to counter the BJP’s focus on Hindu nationalism by developing a rural electoral strategy that promised the passing of an unemployment guarantee.

Prior to the 2004 general election campaign, the Congress Party, recognising the need to engage with the increasingly vocal social movements in favour of a right to work, met with MKSS and other activist groups. Gandhi was persuaded by the activists’ arguments in favour of a right to employment. With Congress deciding to move towards a more ‘rural’ strategy for the election, and with Gandhi’s support, activists were able to convince party leaders to include the right to work within their electoral platform. The Congress-led UPA went on to win the 2004 election. While their success was based largely on urban support, it was interpreted by much of the media as the revolt of the rural poor against the BJP-led NDA (Jenkins & Manor, Reference Jenkins and Manor2017). Congress chose to embrace this idea of a rural revolt, even if it lacked factual support, seeking to develop a long-term electoral strategy that emphasised the party’s pro-poor credentials.

Following the election, Congress established a National Advisory Council (NAC), which served as a social policy development forum and included actors within and outside government, including academics, civil society activists, and former civil servants. The NAC was chaired by Gandhi, whose stature automatically increased the Council’s importance (Chopra, Reference Chopra2011). The NAC took as its first major task the passage of legislation on the right to employment, creating an initial draft of the legislation. The draft included extensive transparency mechanisms meant to enable the poor to hold government actors accountable for implementing the program. The Finance Ministry raised concerns, citing the fiscal danger of such an open-ended promise (Chopra, Reference Chopra2014). Together with the Planning Commission, it sought to add an amendment that would allow the Indian government to suspend the program, and a clause that would limit eligibility to families classified as below the poverty line.

These changes were included in the draft National Rural Employment Guarantee (NREG) Bill introduced to Parliament in December 2004. The new watered-down draft Bill was immediately criticised by civil society, who saw it as a betrayal of a promise to a right to work (Chopra, Reference Chopra2014). Members of the NAC and civil society rallied together to place pressure on Parliamentarians to protect the original provisions of NREG, including engaging with BJP leaders in a strategy of embarrassing Congress for abandoning its initial campaign promises. The Bill was referred to a Parliamentary Standing Committee (PSC) on Rural Development, which ultimately opened the Bill to public consultation.

Civil society and members of the NAC continued to engage with the PSC to alleviate their cost concerns. The final recommendations of the PSC restored the promise of guaranteed employment without exceptions. During final rounds of revisions, Congress’ reliance on leftist parties to maintain its UPA coalition allowed these parties to extract concessions and to return the final Act to something resembling the drafts initially formulated by the NAC. As a result, both the continuing agitations of civil society and the role of coalition party politics helped to ensure that some of the main promises of the right to work were ultimately retained. Therefore, civil society mobilisation in favour of the right to work, in conjunction with electoral competition, ensured the Act’s eventual passage.

Implementing NREGA: electoral and party politics and the limits of redistribution

Democratic politics helps to explain the expansion of social policies like NREGA, but also some of the redistributive limitations. While NREGA has been fraught with several issues (Aggarwal, Reference Aggarwal2016; Dey et al., Reference Dey, Debmalya and Ram2022), we focus on the role democratic institutions played in the underprovision of services for the poor. In particular, the electoral and party politics – which brought NREGA into existence – contributed to these implementation issues.

NREGA increased the power of the panchayat raj, the system of elected local government, expanding the resources it managed and its degree of decision-making power. As demand for employment exceeded the work contracts available, local government officials had considerable discretion in deciding who to allocate projects to. “Indeed, much of the time, opportunities to undertake NREGA work are ‘rationed’ by powerful actors in local arenas – usually by the heads of elected local councils, acting in concert with fellow panchayat members and administrative officials” (Jenkins & Manor, Reference Jenkins and Manor2017, p. 70).

In certain contexts, the rationing of work contracts was based on party affiliation rather than need. For example, in Rajasthan, “localities which elect a legislator from the state-level ruling party are likely to gain priority in the allocation of scarce NREGA projects since opposition party politicians do not possess the same degree of political influence over the bureaucracy.” (Dasgupta, Reference Dasgupta2016, p. 4). This reflected a broader trend in India, where public works projects were distributed along partisan lines, rather than need (Bohlken, Reference Bohlken2018). In the Indian state of Andhra Pradesh, the government used NREGA to distribute government contracts to party-affiliated contractors. In this context:

This suggests that electoral and party politics can contribute to the introduction of social policies like NREGA, as electoral victory can be achieved by political parties that strategically respond to social mobilisation. However, the same forces influence policy implementation and resulted in “political practices” that often diverged “from the ideals of democratic equality” (Fischer & Ali, Reference Fischer and Ali2019, p. 157).

Mobilising for change: the consequences of China’s market transformation

In the late 1970s, the Chinese government began a process of reform and opening, transitioning from a centrally planned economy to a market-based system (Gao et al, Reference Gao, Yang and Li2013). This was a fundamental change. Before the introduction of a market-based system, Mao Zedong, chairman of the Chinese Communist Party from the establishment of the People’s Republic of China (PRC) to his death in 1976, had pursued egalitarian policies with the working class as the bedrock of support. A significant portion of the country’s labour force was employed by state-owned enterprises (SOEs). While these organisations were uncompetitive, they ensured long-term employment and welfare benefits (Chen, Reference Chen2000). As such, pre-reform China was characterised by high levels of poverty, but low levels of income inequality.

After Mao’s death, Deng Xiaoping gradually rose to power. He is credited for introducing China’s far-reaching market-based reforms. Under Deng, capitalism with Chinese characteristics contributed to the rapid economic growth that would eventually lift millions out of poverty. However, the economic transition was marked by the commodification of labour (Wang, Reference Wang, Mechkova and Andersson2002). The system produced winners and losers and subsequently, growing income inequality. At the beginning, the government managed the effects of economic growth by protecting workers’ interests. For example, it provided dual track pricing and subsidies for groups affected by economic reform to minimise contention over economic reforms (Yang, Reference Yang2006).

By the early 1980s, however, the government began to prioritise economic growth over workers’ interests. Efforts to make China into a global manufacturing hub began and took advantage of the cheap wages and unorganised labour (Hui & Chan, Reference Hui and Chan2011). The effects of this approach became apparent and “disputes over wages and welfare, job responsibilities, labor discipline, promotions, and occasionally women workers’ rights arose as market-oriented reformers delegated greater powers to urban enterprise managers to raise labor productivity and competitiveness” (Chan & Selden, Reference Chan, Selden and Wright2019, p. 105). The priority of Chinese policies was economic development and rapid GDP growth, at times at the expense of equality (Fisher, Shang, & Blaxland, Reference Fisher, Shang and Blaxland2010). At the same time, SOEs began to fail. State-sector employment dropped rapidly, contributing to further tension between the government and labour.

The transition to a market-based system was accompanied by a process of rapid urbanisation. In the pre-reform era, China was an agriculturally dominated country. However, as China transitioned to a market-based economy, urbanisation was viewed as a mechanism for growth and modernisation. As market reforms were introduced, millions of workers migrated to cities. The Chinese urban population increased by an average of 16 million residents annually between 1978–2015 (Guan et al., Reference Guan, Wei, Lu, Dai and Su2018). Workers began building infrastructure for the industrial sector including roads, bridges, and high-rise buildings (Wu & Rao, Reference Wu and Rao2017). However, the broader economic transition was not inclusive.

The shift towards a market-based economy was initially characterised by widening income inequality that was especially pronounced in urban centres. While the government had required SOEs to provide living allowances in the 1990s, fewer SOEs provided these payments as the years progressed (Chen, Reference Chen2000). SOE reforms contributed to massive worker layoffs, particularly among poorly educated and low-skilled workers with limited opportunities for re-employment (Leung, Reference Leung2006). In addition, poor working conditions and low wages became prevalent and “the downward mobility for much of the working class…created a new crowd of the dispossessed in urban China” (Yang, Reference Yang2006, p. 151). At the same time, millions of rural-to-urban migrants were not covered by state welfare benefits as the pre-existing hukou system differentiated citizens as either an ‘agricultural’ or ‘non-agricultural’ group (Wu & Rao, Reference Wu and Rao2017). The growing income inequality in urban China set the stage for widespread and mounting social discontent.

Introducing Dibao: placating protesting workers

Widespread labour tensions became a significant threat to the Chinese government. As market reforms accelerated, workers’ living standards declined. Restructuring entailed delayed payments on wages and the suspension of pensions. In addition, layoffs occurred on a large scale. From 1993 to 1998, the number of laid-off workers increased from 3 million to 17.24 million (Cai, Reference Cai2002). By 2002, over 60 million urban workers were laid off from state sector jobs (Chan & Selden, Reference Chan, Selden and Wright2019). Poverty skyrocketed in urban areas and workers struggled to meet their basic needs, contributing to feelings of injustice. At the same time, information was spreading more easily, facilitated by the close contact inherent to urbanisation. Urban workers increasingly voiced their discontent, and pro-democracy ideas became prevalent in the growing city centres (Gao, Yang, & Li, Reference Gao, Yang and Li2013).

Labour’s support of pro-democracy ideas threatened the very foundations of China’s authoritarian state. Their protests were not demanding a return to the system of SOEs but rather the respect of workers’ rights. Large-scale labour protests multiplied across Chinese cities. In 1995, an estimated 1.1 million workers were involved in protests. A short 3 years later in 1998, this grew to over 3.6 million workers (Chen, Reference Chen2000). Protest incidents included traffic blockages, collective petitions, and demonstrations in front of government headquarters. Most of the demonstrations were composed of workers affected by SOE reforms.

Protests became endemic across China. Ultimately, government officials recognised that they could not suppress the conditions faced by the working class without creating greater resentment and outrage. Labour unrest was becoming a breaking point for social stability. Political elites believed that settling the growing social unrest was necessary for economic restructuring to progress. The government adopted strategies of co-optation to diminish the threat of labour protests on social and political stability.

The labour protests – resulting from economic dislocation and distress – triggered government action. In 1999, the Chinese government introduced dibao in urban centres (Leisering et al., Reference Leisering, Liu and ten Brink2017). On paper, this was introduced “in urban areas to assist people in extreme poverty and vulnerability” (Barrientos, Reference Barrientos2013, p. 4). However, it also came at a time when large-scale labour protests were creating political stability and a policy instrument was needed to placate workers affected by the market transformation. In the following years, the government budget allocated to dibao continued to grow. Notably, the government was most responsive to the actors that threatened social stability (Huang, Reference Huang2013), rather than groups claiming loyalty and membership to the Chinese Communist Party (Chen et al., Reference Chen, Pan and Xu2016).

Implementing Dibao: pre-empting dissent through expanded policy

Large-scale labour unrest was initially concentrated in urban centres. Reflecting this, dibao was introduced to urban regions. The program grew rapidly, expanding from 2.8 million recipients in 1999, to 19.3 million recipients in 2002, to 23.3 million recipients in 2009 (Solinger & Hu, Reference Solinger and Hu2012). Over time, protests spread outward to the rural areas. As wealth was concentrated in urban areas, rural residents were left behind. In addition, agricultural workers were burdened with high taxation and subjected to land appropriation. The wealth gap widened and the average per capita income in rural areas became less than a third of that in urban centres. As a result, the intensity and frequency of protests grew from an estimated 8,700 mass incidents in 1993 to 180,000 mass incidents in 2011 (Yeh, O’Brien, & Ye, Reference Yeh, O’Brien and Ye2013).

The government responded by introducing the rural dibao program in 2007 (Leisering et al., Reference Leisering, Liu and ten Brink2017). Since then, the rural dibao program has grown significantly larger than its urban counterpart (Golan et al., Reference Golan, Sicular and Umapathi2017). For instance, from 36 million recipients in 2007, rural dibao increased its coverage to 50 million recipients in 2011, which was then twice the size of urban dibao. Up to mid-2021, rural dibao covered 35.4 million, more than four times as many as urban dibao which covered 7.7 million poor residents (Government of China, 2021).

The government had introduced dibao to quell social unrest – and the implementation of the policy followed a similar logic. On paper, dibao was meant to target those affected by poverty. But in practice, it was distributed to individuals the government wished to control (Pan, Reference Pan2020). Dibao’s targeted populations included “individuals whom the regime has insufficient evidence to prosecute but who are placed under intensive surveillance and control” so the regime could “prevent them from committing “crimes” such as protesting and petitioning in the future” (Pan, Reference Pan2020, p. 3).

As the government could use the social policy to manage social unrest, the program’s coverage increased rapidly. However, the social policy did not necessarily serve low-income individuals facing destitution, but rather low-income individuals the regime wanted to manage:

Indeed, scholars have noted that the majority of dibao’s beneficiaries do not actually qualify for the program (Golan et al., Reference Golan, Sicular and Umapathi2017; Hammond, Reference Hammond2019). In the context of authoritarianism, the government introduced the program to maintain the social and political order.