Watershed development, decentralisation and institutional competition

In India's semi-arid regions, watershed development (WSD) is one of the core strategies used to arrest widespread resource degradation and reduce poverty. Annually, a substantial amount of capital is invested in WSD programmes in India albeit their questionable performance to date. In recent years, many WSD programmes have taken a participatory approach, where state governments share costs and benefits with local communities. The shift towards a more decentralised approach stems from the failure of the top-down approach. The 73rd amendment of the Indian Constitution, aimed at strengthening local government collectively called Panchayat Raj Institutions at district, block and village levels, provided further impetus to the participatory approach. This chapter examines the nature of the recent institutional changes in WSD programmes in India and their implications. The findings highlight the challenges of implementing WSD programmes within a decentralised governance system. In particular, transaction costs imposed by information asymmetries and the need to embed WSD governance structures within the local PRI system are emphasised. © 2012 by Nova Science Publishers, Inc. All rights reserved.