IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/1639.html
   My bibliography  Save this paper

Electoral Accountability and the Natural Resource Curse: Theory and Evidence from India

Author

Listed:
  • Amrita Dhillon
  • Pramila Krishnan
  • Manasa Patnam
  • Carlo Perroni

Abstract

The literature on the effects of natural resource abundance on economic growth is converging to the view that institutions play a central role. In this paper, we exploit the break up of three of the biggest Indian states, comprising areas with some of the largest endowments of natural resources in the country, to explore how the link between electoral accountability and natural resource abundance can explain differences in outcomes. Our theoretical framework shows that while states inheriting a larger share of natural resources after break up are potentially richer, the spatial distribution of these natural resources within these state can worsen economic outcomes by lowering electoral accountability. We employ a sharp regression discontinuity design to estimate the causal effect of secession and concentrated resources on growth and inequality at the sub-regional level, using data on satellite measurements of night-time lights. Consistent with our theoretical predictions, the economic effect of secession is generally favourable. However, states that inherit a large fraction of mineral rich constituencies experience worse outcomes. This may be accounted for by lower electoral accountability in those areas.

Suggested Citation

  • Amrita Dhillon & Pramila Krishnan & Manasa Patnam & Carlo Perroni, 2016. "Electoral Accountability and the Natural Resource Curse: Theory and Evidence from India," Cambridge Working Papers in Economics 1639, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1639
    Note: pk237
    as

    Download full text from publisher

    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1639.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
    2. Francesco Caselli & Guy Michaels, 2013. "Do Oil Windfalls Improve Living Standards? Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 208-238, January.
    3. Chakraborty, Lekha, 2014. "Revival of mining sector in India: Analysing legislations and royality regime," Working Papers 14/129, National Institute of Public Finance and Policy.
    4. repec:cup:apsrev:v:100:y:2006:i:01:p:115-131_06 is not listed on IDEAS
    5. Carlos A Leite & Jens Weidmann, 1999. "Does Mother Nature Corrupt? Natural Resources, Corruption, and Economic Growth," IMF Working Papers 99/85, International Monetary Fund.
    6. Nishith Prakash & Marc Rockmore, 2014. "Do Criminal Representatives Hinder or Improve Constituency Outcomes? Evidence from India," Working papers 2014-20, University of Connecticut, Department of Economics.
    7. Raymond Fisman & Florian Schulz & Vikrant Vig, 2012. "Private Returns to Public Office," Working Papers id:4979, eSocialSciences.
    8. Gomes, Joseph Flavian, 2015. "The Political Economy of the Maoist Conflict in India: An Empirical Analysis," World Development, Elsevier, vol. 68(C), pages 96-123.
    9. Acemoglu, Daron & Robinson, James A., 2006. "Economic Backwardness in Political Perspective," American Political Science Review, Cambridge University Press, vol. 100(01), pages 115-131, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Natural Resources and Economic Performance; Political Secession; Fiscal Federalism;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cam:camdae:1639. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jake Dyer). General contact details of provider: http://www.econ.cam.ac.uk/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.