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Electoral goals and center-state transfers: A Theoretical model and empirical evidence from India

Author

Listed:
  • Wiji Arulampalam

    (University of Warwick, UK)

  • Sugato Dasgupta

    (Jawaharlal Nehru Univesity, New Delhi)

  • Amrita Dhillon

    (University of Warwick, UK)

  • Bhaskar Dutta

    (University of Warwick, UK)

Abstract

We construct a model of redistributive politics where the central government is opportunistic and uses its discretion to make transfers to state governments on the basis of political considerations. These considerations are the alignment between the incumbent parties at the central and state levels and whether a state is a swing state or not. A testable prediction from the model is that a state that is both swing and aligned with the central government is especially likely to receive higher transfers. We test this prediction using Indian data for 14 states from 1974-75 to 1996-97. We ?nd that a state which is both aligned and swing in the last state election is estimated to receive 16 higher transfers than a state which is unaligned and non-swing.

Suggested Citation

  • Wiji Arulampalam & Sugato Dasgupta & Amrita Dhillon & Bhaskar Dutta, 2008. "Electoral goals and center-state transfers: A Theoretical model and empirical evidence from India," Discussion Papers 08-14, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:08-14
    as

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    References listed on IDEAS

    as
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    4. Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2009. "Electoral goals and center-state transfers: A theoretical model and empirical evidence from India," Journal of Development Economics, Elsevier, vol. 88(1), pages 103-119, January.
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    More about this item

    Keywords

    Redistributive Politics; Alignment; Swing; Electoral Competition;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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