Does Local Urban Governance Status Matter? Evidence from India

TL;DR

This paper investigates how achieving Census Town status in India influences local governance and public goods provision, showing that statutory recognition leads to significant improvements in infrastructure and services.

Contribution

It provides causal evidence that meeting criteria for Census Town classification enhances urban governance and public service delivery in India.

Findings

Statutory recognition increases government schools and healthcare facilities.

Urban amenities improve, but sports infrastructure declines, indicating land reallocation.

Crossing the eligibility threshold positively impacts public goods provision.

Abstract

We exploit quasi-random variation around the multi-threshold criteria used to classify Census Towns (CTs) and focus on settlements near the thresholds that are likely to obtain statutory recognition. Using a local fuzzy regression discontinuity design and a multi-threshold criteria, we show that meeting the CT eligibility in 2001 raises the probability of statutory recognition by 2011. Instrumenting statutory recognition with CT eligibility, we estimate the effects of ULB status on local public goods provision: government schools increase by 13.86 (primary), 7.72 (middle), and 4.89 (secondary) units, healthcare infrastructure expands by 2.53 hospitals and 3.00 family welfare centers, and financial access deepens with 4.09 cooperative banks and 2.84 agricultural credit societies. Community amenities also improve, while sports infrastructure declines by 5.71 facilities, consistent with reallocation of urban land. The corresponding reduced-form estimates are directionally consistent and indicate that crossing the CT eligibility frontier improves public goods provision. Our findings indicate that timely municipalization of emerging urban areas can expand provision of public goods.