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Leader Selection Rules and Accountability: Exploiting Exogenous Variation in the Formation of Ugandan Farmer Associations

Open Panel

Abstract

n almost all naturally occurring settings, leader selection rules are chosen endogenously through a complex political process. This makes the estimation of the causal effects of political selection rules, challenging. This paper overcomes this identification challenge by taking advantage of a unique setting that resulted in exogenous variation in the rules for electing leaders of newly created Uganda farmer cooperatives. In about half of the farmer cooperatives, during the process of group formation, external intervention facilitators encouraged the groups to adopt a representative-vote system for electing their leader. In the other half, cooperatives were encouraged to adopt a system of direct-vote by all group members. Applying an encouragement research design, the paper uses the facilitators'' recommendation as an instrumental variable for the leader selection rules. Based on more than 3,000 surveys of sampled members from 50 farmer cooperatives as well as on complete network data of the groups'' representatives, I find that direct-vote resulted in leaders who are significantly more accountable to members. Compared to representatives-vote groups, direct-vote groups hold elections more frequently and are more likely to use both internal and external auditors to review the group''s books and records. Members in direct-vote groups are more likely to receive receipts when selling crops through the groups and are more likely to report that their group leader is monitored. Enjoying greater sense of legitimacy from both members and representatives, cooperative leaders elected through direct vote are more likely to punish members who break their group''s rules and by-laws. The results suggest that direct participation in meaningful political decision-making can substantially increase leaders accountability increase leaders accountability and legitimacy.