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Political economy of third party interventions

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  • Das, Sabyasachi
  • Dutta, Souvik
  • Sarkar, Abhirup

Abstract

The paper examines political economy consequences of a third party (World Bank) intervention in India. The intervention was a capacity building initiative that trained local politicians in various governance procedures in a sample of villages. We show that the state government reacted to the intervention by allocating additional resources to program villages with aligned incumbents. Consequently, party switching by opposition incumbents in favor of the ruling party went up significantly in program villages. Moreover, the reelection rate of opposition party incumbents went down due to the intervention, especially for those who didn’t switch parties. The results highlight the importance of considering political economy consequences of such interventions, even in countries not heavily reliant on foreign assistance, to better understand their overall welfare effects.

Suggested Citation

  • Das, Sabyasachi & Dutta, Souvik & Sarkar, Abhirup, 2021. "Political economy of third party interventions," Journal of Public Economics, Elsevier, vol. 195(C).
    • Handle: RePEc:eee:pubeco:v:195:y:2021:i:c:s004727272030195x
    DOI: 10.1016/j.jpubeco.2020.104331
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    Cited by:

    1. Das, Sabyasachi, 2020. "(Don’t) leave politics out of it: Reflections on public policies, experiments, and interventions," World Development, Elsevier, vol. 127(C).
    2. Sabyasachi Das, 2019. "(Don’t) Leave Politics Out of It: Reflections on Public Policies, Experiments, and Interventions," Working Papers 24, Ashoka University, Department of Economics.

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    More about this item

    Keywords

    Policy evaluation; Party switching; Reelection; Gram Panchayat;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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