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Electoral goals and center-state transfers : a theoretical model and empirical evidence from India

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Arulampalam, Wiji, Dasgupta, Sugato, Dhillon, Amrita and Dutta, Bhaskar. (2009) Electoral goals and center-state transfers : a theoretical model and empirical evidence from India. Journal of Development Economics, Vol.88 (No.1). pp. 103-119. ISSN 0304-3878

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Official URL: http://dx.doi.org/10.1016/j.jdeveco.2008.01.001

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 find 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.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory J Political Science > JA Political science (General)
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Elections, Noncooperative games (Mathematics)
Journal or Publication Title:	Journal of Development Economics
Publisher:	Elsevier
ISSN:	0304-3878
Date:	January 2009
Volume:	Vol.88
Number:	No.1
Page Range:	pp. 103-119
Identification Number:	10.1016/j.jdeveco.2008.01.001
Status:	Peer Reviewed
Access rights to Published version:	Open Access
Description:	Version accepted by publisher (post-print, after peer review, before copy-editing). Corrected proof.
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URI:	http://wrap.warwick.ac.uk/id/eprint/152