Do criminally accused politicians affect economic outcomes? Evidence from India

We study the causal impact of electing criminally accused politicians to state legislative assemblies in India on the subsequent economic performance of their constituencies. Using data on the criminal background of candidates running in state assembly elections for the period 2004–2008 period and a constituency-level measure of economic activity proxied by the intensity of night-time lights, we employ a regression discontinuity design and find that narrowly electing a criminally accused politician lowers the growth of the intensity of night-time lights by about 24 percentage points (approximately 2.4 percentage point lower GDP growth). The negative impact is more pronounced for legislators who are accused of serious or financial charges, have multiple accusations, are from the non-ruling party, have less than a college education, or have below median wealth. Overall, we find that the effect appears to be concentrated in the less developed and the more corrupt states. Similar findings emerge for the provision of public goods using data on India's major rural roads construction program.