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Cash for Votes: Evidence from India

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  • Anirban Mitra
  • Shabana Mitra
  • Arnab Mukherji

Abstract

This paper investigates the prevalence of vote-buying in democratic elections where stringent restrictions on corporate donations to political parties exist. We combine data from state assembly elections in India with household-level consumer expenditure surveys (conducted by NSSO) over the period 2004-11. Exploiting a difference-in-differences methodology, we estimate the effects elections have on the consumption of various household items: food, clothes, education-related, etc. Moreover, there is heterogeneity in such consumption adjustments across households. Our estimates suggest that legal sources of funds are not sufficient for generating such "spikes" in consumption and indicate the role of the hidden economy in politics.

Suggested Citation

  • Anirban Mitra & Shabana Mitra & Arnab Mukherji, 2017. "Cash for Votes: Evidence from India," Studies in Economics 1711, School of Economics, University of Kent.
    • Handle: RePEc:ukc:ukcedp:1711
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    References listed on IDEAS

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    2. Eggers, Andrew C. & Hainmueller, Jens, 2009. "MPs for Sale? Returns to Office in Postwar British Politics," American Political Science Review, Cambridge University Press, vol. 103(4), pages 513-533, November.
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    6. Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2009. "Electoral goals and center-state transfers: A theoretical model and empirical evidence from India," Journal of Development Economics, Elsevier, vol. 88(1), pages 103-119, January.
    7. Tarozzi, Alessandro, 2005. "The Indian Public Distribution System as provider of food security: Evidence from child nutrition in Andhra Pradesh," European Economic Review, Elsevier, vol. 49(5), pages 1305-1330, July.
    8. Alessandro Tarozzi & Aprajit Mahajan & Brian Blackburn & Dan Kopf & Lakshmi Krishnan & Joanne Yoong, 2014. "Micro-loans, Insecticide-Treated Bednets, and Malaria: Evidence from a Randomized Controlled Trial in Orissa, India," American Economic Review, American Economic Association, vol. 104(7), pages 1909-1941, July.
    9. Anirban Mitra & Shabana Mitra, 2017. "Electoral Uncertainty, Income Inequality and The Middle Class," Economic Journal, Royal Economic Society, vol. 127(602), pages 1119-1152, June.
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    Cited by:

    1. Anand Murugesan & Jean-Robert Tyran, 2023. "The Puzzling Practice of Paying “Cash for Votes”," CESifo Working Paper Series 10504, CESifo.
    2. Toke Aidt & Zareh Asatryan & Lusine Badalyan & Friedrich Heinemann, 2020. "Vote Buying or (Political) Business (Cycles) as Usual?," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 409-425, July.
    3. Gerling, Lena & Kellermann, Kim Leonie, 2019. "The impact of election information shocks on populist party preferences: Evidence from Germany," CIW Discussion Papers 3/2019, University of Münster, Center for Interdisciplinary Economics (CIW).
    4. Thushyanthan Baskaran & Sonia Bhalotra & Brian Min & Yogesh Uppal, 2018. "Women legislators and economic performance," WIDER Working Paper Series wp-2018-47, World Institute for Development Economic Research (UNU-WIDER).
    5. Amrita Dhillon & Pramila Krishnan & Manasa Patnam & Carlo Perroni, 2020. "Secession with Natural Resources," The Economic Journal, Royal Economic Society, vol. 130(631), pages 2207-2248.
    6. Gerling, Lena & Kellermann, Kim Leonie, 2022. "Contagious populists: The impact of election information shocks on populist party preferences in Germany," European Journal of Political Economy, Elsevier, vol. 72(C).
    7. Savu, A., 2021. "The Local Political Economy of Austerity: Lessons from Hospital Closures in Romania," Cambridge Working Papers in Economics 2120, Faculty of Economics, University of Cambridge.

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    More about this item

    Keywords

    Political economy; election finance; black economy;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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