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Do Smaller States Lead to More Development? Evidence from Splitting of Large States in India

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  • Ray, M.
  • Maredia, M.

Abstract

Struggles for greater autonomy or more homogenous jurisdictions within a federal system has been a consistent phenomenon of the current nation states. However, there remains very little rigorous evidence of more autonomy and homogenous jurisdiction on development outcomes. Creation of three new states in India in the year 2000 allows us to test these development hypotheses. As states are the proximate determinants of local institutions driving development outcomes, a change in their boundaries provides us an opportunity to evaluate the impact of these shifts on the provision of public goods and distribution of development outcomes. We use quasi-experimental methods like difference in difference with parent state as comparison and newly formed state as treatment, alternatively we consider both the split states as two treatments with nearby states as comparison. Further, we use geographic discontinuity across the newly formed borders to show that districts in the newly created states are doing better on development indicators after splitting from their parent state. Acknowledgement :

Suggested Citation

  • Ray, M. & Maredia, M., 2018. "Do Smaller States Lead to More Development? Evidence from Splitting of Large States in India," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277181, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277181
    DOI: 10.22004/ag.econ.277181
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