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Albert Hirschman Centre on Democracy

The Puzzle of Unspent Funds: The Institutional Architecture of Unaccountable Governance

Project Lead: Deval Desai, Shalini Randeria

Researchers: Deval Desai, Christine Lutringer

Timeline: 2019-2020

Keywords: Accountability, Regulation, Citizenship, Local governance, Administrative law

Funding Organisation: Swiss National Science Foundation (SNF), Spark funding scheme

This project focuses on the phenomenon of hundreds of billions of Euros of unspent social special-purpose funds in both India and the EU (and, we suspect, globally). By “social special-purpose”, we mean funds that have been collected by law for a specific social purpose that would otherwise be the domain of discretionary state policy. These funds are held in some vehicle that reflects this social purpose (such as a trust or a fund) rather than simply being absorbed into ordinary administrative budget lines. By “unspent”, we refer to instances where a significant proportion of these funds remains both uncaptured by other interests (e.g. embezzled), and unspent during a discrete timeframe (e.g. the fiscal year) and for the purpose for which they are earmarked.

The project is an initial study to map the extent and nature of this phenomenon and develop methodologies to study it. We study unspent funds in India and Italy, and explore their institutional and regulatory preconditions along with their socio-political effects. This runs counter to conventional wisdom, which understands the state as a vehicle of resource distribution, and thus unspent funds as a symptom of temporary institutional blockage in the state.