The political consequences of resource scarcity: Targeted spending in a water-stressed democracy

Meera Mahadevan and Ajay Shenoy

Journal of Public Economics, 2023, vol. 220, issue C

Abstract: We study whether resource scarcity enhances the scope for targeted spending in India. Farmers without access to groundwater during dry seasons cope using a large public-aid program controlled by local politicians. We leverage a multidimensional regression discontinuity for exogenous variation in whether local politicians are aligned with the state’s ruling party. We find that the state government channels disproportionate funds to politically-aligned jurisdictions in water-stressed areas and gains votes in subsequent elections. However, we find no partisan differences in aid allocation for non-water-stressed areas, suggesting a selective targeting of public funds to garner votes in the highest-return regions.

JEL-codes: D72 H53 I38 O13 Q25 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:220:y:2023:i:c:s0047272723000245

DOI: 10.1016/j.jpubeco.2023.104842

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