Resource Transfers to Local Governments: Political Manipulation and Voting Patterns in West Bengal

Anusha Nath and Dilip Mookherjee
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Anusha Nath: Federal Reserve Bank of Minneapolis and University of Minnesota

No 1266, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: This paper examines how electoral competition in parliamentary constituencies aects allocation of resources to local governments and subsequent impacts on voter behavior. We examine the consequences of treating the 2007 redistricting of electoral boundaries in rural West Bengal as a shock to political competition between the Left Front (LF) and Trinamool Congress (TMC) in the parliamentary constituency that a village is located in. 21 villages out of a sample of 89 villages were redistricted by a non-partisan Election Commission to a dierent constituency. Using electoral victory margins in the previous 2004 election as a measure of political competition, we find that resources transferred by LF-controlled district governments to LF-dominated village governments for citizen benefit programs increased significantly if moved to an electoral constituency where the LF was in a weaker competitive position. These changes in benefit flows help predict corresponding changes in vote shares, consistent with the view that resource transfers to GPs were motivated by electoral considerations. Stronger changes were exhibited for recurring private benefits (mainly employment program (NREGA) funds) compared to one-time private benefits and local public goods (water, housing, roads, BPL cards). The evidence is consistent with models of electoral opportunism based on pork-barrel politics and/or clientelistic relational contracts between parties and voters, particularly the latter.

Date: 2017
New Economics Papers: this item is included in nep-cdm, nep-dev, nep-pol and nep-ure
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