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Growth and Election Outcomes in a Developing Country

Author

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  • Gupta, Poonam

    (National Institute of Public Finance and Policy)

  • Panagariya, Arvind

    (Columbia University)

Abstract

With the exception Brander and Drazen (2008), who use a comprehensive cross-country database consisting of both developed and developing countries, the hypothesis that rapid growth helps incumbents win elections has been tested exclusively for the developed countries (e.g., Ray Fair 1978). But since sustained rapid growth offers the prospect of pulling vast numbers of the voters out of poverty within a generation, such an effect is far more likely to be present in the developing rather than developed countries. In this paper, we offer the first test of the hypothesis on a large developing and poor country, India, which has seen its economy grow 8 to 9 percent recently. We first generalize the Fair model to allow for multiple candidates instead for just two and then test it using crossstate data. We find quantitatively large and statistically robust effect of growth on the prospects of the candidates of the state incumbent parties to win elections. Specifically, we use the data on 422 candidates in the 2009 parliamentary elections and show that the candidates of incumbent parties in high-growth states have much better prospects of victory than those in low-growth states.

Suggested Citation

  • Gupta, Poonam & Panagariya, Arvind, 2011. "Growth and Election Outcomes in a Developing Country," Working Papers 11/92, National Institute of Public Finance and Policy.
  • Handle: RePEc:npf:wpaper:11/92
    Note: Working Paper 92, 2011
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    References listed on IDEAS

    as
    1. Adi Brender & Allan Drazen, 2008. "How Do Budget Deficits and Economic Growth Affect Reelection Prospects? Evidence from a Large Panel of Countries," American Economic Review, American Economic Association, vol. 98(5), pages 2203-2220, December.
    2. Alesina, A. & Rosenthal, H., 1989. "Moderating Elections," Working papers 537, Massachusetts Institute of Technology (MIT), Department of Economics.
    3. Bornier Jean Magnan de & Norpoth H. & Lewis-Beck M.S. & Lafay J.D., 1991. "Economics and Politics The calculus of support," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 2(4), pages 579-581, December.
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    Cited by:

    1. Dutta, Bhaskar & Gupta, Poonam, 2012. "How Indian Voters Respond to Candidates with Criminal Charges: Evidence from the 2009 Lok Sabha Elections," Working Papers 12/109, National Institute of Public Finance and Policy.
    2. Gupta, Poonam, 2013. "What do the Voters Reward: Personality, Party or Performance?," MPRA Paper 53795, University Library of Munich, Germany.
    3. Stanley L. Winer & J. Stephen Ferris & Bharatee Bhusana Dash & Pinaki Chakraborty, 2021. "Political competitiveness and the private–public structure of public expenditure: a model and empirics for the Indian States," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(6), pages 1430-1471, December.
    4. Milan Vaishnav & Johnathan Guy, 2018. "Does Higher Turnout Hurt Incumbents? An Analysis of State Elections in India," Studies in Indian Politics, , vol. 6(1), pages 71-87, June.
    5. Bharatee Bhusana Dash & J. Stephen Ferris, 2018. "Economic Performance and Electoral Volatility: Testing the Economic Voting Hypothesis on Indian States, 1957–2013," Carleton Economic Papers 18-07, Carleton University, Department of Economics.

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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