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Social Preference and Governance: A Case Study in India

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  • Dinda, Soumyananda

Abstract

This study investigates the relationship between social choice and fiscal performance in India since 1991. Social choice is simple measurement in public affair activities like participating in election. Vote turnover in a democracy is taken to measure trust on institution. Social trust is considered as a proxy of social capital. Truly, the percentage vote turnover is the measurement of the level of citizens’ chance to express their preferences, which certainly help to increase governmental responsibility and accountability and thereby government performance. Here, the government is forced to be responsive to citizens’ preferences and the underlying social contract rule, which leads to a higher level of fiscal discipline. Using principal component analysis we construct social capital index that captures both structural and cultural aspects. Fiscal institution in India becomes weak in the post reform era. Group of politicians are much more interest about their local or regional issues than national issues even they are not interested to formulate regional development policy through discussion in the Parliament of India. Here higher value of social index indicates higher level of social trust as proxy of higher social capital. High social capital inversely affects the fiscal performance.

Suggested Citation

  • Dinda, Soumyananda, 2015. "Social Preference and Governance: A Case Study in India," MPRA Paper 75828, University Library of Munich, Germany, revised 14 Apr 2015.
    • Handle: RePEc:pra:mprapa:75828
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    More about this item

    Keywords

    Social Preference; Trust; Social Capital; Vote Turnover; Institution; Performance of Government; Fiscal Performance;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H0 - Public Economics - - General
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • Z1 - Other Special Topics - - Cultural Economics
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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