Arulampalam, Wiji, Dasgupta, Sugato and Dhillon, Amrita (2008) Electoral goals and center-state transfers : a theoretical model and empirical evidence from India. Discussion Paper. Bonn: Forschungsinstitut zur Zukunft der Arbeit. (Discussion paper (Forschungsinstitut zur Zukunft der Arbeit).

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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:	Working or Discussion Paper (Discussion Paper)
Subjects:	H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	India -- Politics and government -- 1947-, Noncooperative games (Mathematics), Government spending policy -- India
Series Name:	Discussion paper (Forschungsinstitut zur Zukunft der Arbeit)
Publisher:	Forschungsinstitut zur Zukunft der Arbeit
Place of Publication:	Bonn
Date:	February 2008
Number:	No.3376
Number of Pages:	38
Institution:	University of Warwick
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Funder:	Indian Statistical Institute. Policy Planning Research Unit, University of Warwick
Version or Related Resource:	Arulampalam, W., Dasgupta, S. and Dutta, B. (2008). Electoral goals and center-state transfers: A theoretical model and empirical evidence from India. Journal of Development Economics.
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URI:	http://wrap.warwick.ac.uk/id/eprint/9

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