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Building connections: Political corruption and road construction in India

Jonathan Lehne, Jacob Shapiro and Oliver Vanden Eynde
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Jonathan Lehne: PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics
Jacob Shapiro: Princeton's Woodrow Wilson School of Public and International Affairs - Princeton University

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Abstract: Politically-driven corruption is a pervasive challenge for development, but evidence of its welfare effects are scarce. Using data from a major rural road construction programme in India we document political influence in a setting where politicians have no official role in contracting decisions. Exploiting close elections to identify the causal effect of coming to power, we show that the share of contractors whose name matches that of the winning politician increases by 83% (from 4% to 7%) in the term after a close election compared to the term before. Regression discontinuity estimates at the road level show that political interference raises the cost of road construction and increases the likelihood that roads go missing.

Keywords: Corruption; Political connections; Public procurement; Kinship networks (search for similar items in EconPapers)
Date: 2018-03
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01802896
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Published in Journal of Development Economics, Elsevier, 2018, 131, pp.62 - 78. 〈10.1016/j.jdeveco.2017.10.009〉

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01802896

DOI: 10.1016/j.jdeveco.2017.10.009

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