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Political Economy of Third Party Interventions

Author

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  • Sabyasachi Das

    (Department of Economics, Ashoka University)

  • Abhirup Sarkar

    (Economics Research Unit, Indian Statistical Institute, Kolkata)

  • Souvik Dutta

    (Economics Department, Indian Institute of Management, Bangalore)

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 while reducing allocation in program villages with rival incumbents. Consequently, party switching by opposition incumbents went up in program villages. Moreover, the reelection rate of incumbents went down due to the intervention, especially in GPs where no incumbents switched their party affiliations. 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 its overall welfare effects.

Suggested Citation

  • Sabyasachi Das & Abhirup Sarkar & Souvik Dutta, 2019. "Political Economy of Third Party Interventions," Working Papers 20, Ashoka University, Department of Economics.
    • Handle: RePEc:ash:wpaper:20
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    Cited by:

    1. 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.
    2. Das, Sabyasachi, 2020. "(Don’t) leave politics out of it: Reflections on public policies, experiments, and interventions," World Development, Elsevier, vol. 127(C).

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    More about this item

    Keywords

    Gram Panchayat;

    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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