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Political Determinants of the Allocation of Public Expenditures: A Study of the Indian States

Bharatee Dash () and Angara V. Raja ()
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Angara V. Raja: Dept. of Economics, University of Hyderabad

Working Papers from National Institute of Public Finance and Policy

Abstract: This study examines whether the allocation of public expenditures of the Indian states are significantly influenced by government specific political characteristics. Three types of government specific characteristics are considered: forms of governments, ideology of the government, and the electoral cycle. A number of hypotheses are designed to link these characteristics with expenditure allocation. The hypotheses are tested using a panel dataset of 14 Indian states spread over 27 fiscal years, from 1980-81 to 2006-07. The overall findings of the study suggest that the relationship between expenditure allocation and political determinants across the Indian states validate the proposed hypotheses even after controlling for the traditional and other unobservable determinants. These findings are robust to various forms of sensitivity analyses.

Keywords: Political determinants; Expenditure; Political parties; Interest groups; Indian states (search for similar items in EconPapers)
JEL-codes: H0 H1 H2 (search for similar items in EconPapers)
Pages: 26
Date: 2012-03
New Economics Papers: this item is included in nep-pbe and nep-pol
Note: Working Paper 101, 2012
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