Municipal electoral competition and the economic condition of households: Evidence from the slums of Kolkata

The effect of political competition on growth and other economic outcomes has largely been examined in the context of developed countries and at macro level. We address these limitations by taking the case of a developing country – India – and examining the effect of competition and fragmentation at the urban local body level (the lowest tier of urban governance) on slum's economic outcomes such as occupation, expenditure and inequality. For this purpose, we collected primary data in slums in the major metropolitan region of Kolkata in 2012 and 2021. Our empirical findings suggest that political clout, political competition and political alignment influence the choice of occupation in slum households. The positive effect of the political clout variable on some employment categories (private sector) and not others (skilled or semiskilled labour) highlight the close link between economic mobility and political connections, which can perpetuate socioeconomic inequality. Further, political competition reduces inequality. The results suggest the need for India to consider planned development rather than development through political incentives.