Religious Identity and the Provision of Public Goods: Evidence from the Indian Princely States
AbstractReligious identity affects preferences and can consequently affect policy. We propose two mechanisms through which a ruler's religious identity can affect public good provision: i) greater provision of goods in regions where more subjects are the ruler's co-religionists, and ii) lower provision of goods where private markets provide a substitute to the ruler's co-religionists. Empirically, identifying the causal effect of religious identity on policy is often impossible, since the religious identity of rulers rarely changes over time and place. We address this problem by exploiting the variation in the religion of rulers in the Indian Princely States in the early 20th century. The Indian Princely States had significant variation in the religion of the ruler (primarily Hindu and Muslim), often due to unique historical experiences. Using data from the 1911 census, we fin d that Muslim-ruled states had lower Hindu literacy but the religion of the ruler had no statistically significant impact on Muslim literacy, railroad ownership or post office provision. These results support the idea that rulers provide less public goods when religious institutions provide a substitute targeted at their co-religionists, but there is only weak evidence that rulers provide more public goods when more subjects share their religious identity.
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Bibliographic InfoPaper provided by Chapman University, Economic Science Institute in its series Working Papers with number 13-26.
Length: 31 pages
Date of creation: 2013
Date of revision:
identity; public goods; religion; Islam; Hinduism; literacy; India; Princely States;
Find related papers by JEL classification:
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
- N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
- N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
- Z10 - Other Special Topics - - Cultural Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-HIS-2013-10-18 (Business, Economic & Financial History)
- NEP-PBE-2013-10-18 (Public Economics)
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