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The Political Economy of Privatization of Education: Role of Local Politicians in India

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  • Kalliyil, Muneer

    (Indian Institute of Management Bangalore)

  • Sahoo, Soham

    (Indian Institute of Management Bangalore)

Abstract

We investigate the role of political favouritism in the private education market. Using constituency-level panel data and a close-election regression discontinuity design, we estimate the causal effect of having a politician aligned with the state ruling party on the growth of private educational institutions in India. We find that constituencies represented by aligned politicians have a higher growth rate in the number of private schools, while the effect is insignificant for government schools. Similar patterns are also found for higher education institutions. As potential mechanisms, we explore political influence over bureaucratic processes and discrepancies in the enforcement of government regulations.

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  • Kalliyil, Muneer & Sahoo, Soham, 2024. "The Political Economy of Privatization of Education: Role of Local Politicians in India," IZA Discussion Papers 17527, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp17527
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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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