Gains from a Redrawing of Political Boundaries: Evidence from State Reorganization in India

This paper analyzes the impact of a redrawing of political boundaries on voting patterns. It investigates whether secession of states leads to gains in terms of better conformity of the electorate's political preferences with those of the elected representatives. We study these issues in the context of reorganization of states in India. Madhya Pradesh, the biggest state in India before the reorganization, was subdivided into Madhya Pradesh and Chhattisgarh in 2000, the latter accounting for less than one-fourth of the electorate of undivided Madhya Pradesh. Using socio-economic composition and traditional voting patterns, we argue that there were differences in political preferences between Madhya Pradesh and Chhattisgarh. However, in electoral democracies, the amount of transfers that a constituency gets depends crucially on whether the local representative belongs to the ruling party. Under these circumstances, we show in a theoretical context that when it is part of the same state, the smaller region would vote strategically to elect representatives with preferences more closely aligned to those of the bigger region. Once it constitutes a separate state however, this motive would no longer operate. Exploiting detailed data on state elections in Madhya Pradesh and Chhattisgarh in 1993, 1998 and 2003 and a difference-in-differences estimation strategy, we show that these predictions are validated empirically - there is a significant divergence in voting behavior between the two regions in 2003 compared to the pre-reorganization period.