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Do political determinants affect the size and composition of public expenditure? A study of the Indian states

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  • Bharatee Dash
  • Angara Raja

Abstract

This study examines whether there exists a systematic link between the size and composition of public expenditure and the political determinants across the Indian states. Three types of political determinants—forms of governments, government’s ideology, and electoral cycle—are identified and three sets of hypotheses are designed linking these characteristics with three different measures of public expenditure. The hypotheses are tested using a panel dataset of 14 Indian states spread over 27 fiscal years, from 1980–1981 to 2006–2007. The overall findings of the study suggest that the relationship between expenditure measures and political determinants across the Indian states validates the proposed hypotheses even after controlling for the traditional and other unobservable determinants. These findings are robust to various forms of sensitivity analysis. Copyright Springer-Verlag Berlin Heidelberg 2013

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  • Bharatee Dash & Angara Raja, 2013. "Do political determinants affect the size and composition of public expenditure? A study of the Indian states," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(3), pages 293-317, September.
    • Handle: RePEc:spr:inrvec:v:60:y:2013:i:3:p:293-317
    DOI: 10.1007/s12232-013-0173-5
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    3. Mohanty, Biswajit & Bhanumurthy, N. R. & Dastidar, Ananya Ghosh, 2017. "What explains Regional Imbalances in Infrastructure?: Evidence from Indian States," Working Papers 17/197, National Institute of Public Finance and Policy.
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    7. Sacchidananda Mukherjee & Shivani Badola, 2021. "Public Financing of Human Development in India: A Review," Indian Journal of Human Development, , vol. 15(1), pages 62-81, April.

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    More about this item

    Keywords

    Political determinants; Public expenditure; Political parties; Interest groups; Indian states; H0; H1; H2;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • H1 - Public Economics - - Structure and Scope of Government
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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