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Growth and Election Outcomes in a Developing Country

Author

Listed:
  • Gupta, Poonam

    () (National Institute of Public Finance and Policy)

  • Panagariya, Arvind

    () (Columbia University)

Abstract

With the exception Brander and Drazen (2008), who use a comprehensive cross-country database consisting of both developed and developing countries, the hypothesis that rapid growth helps incumbents win elections has been tested exclusively for the developed countries (e.g., Ray Fair 1978). But since sustained rapid growth offers the prospect of pulling vast numbers of the voters out of poverty within a generation, such an effect is far more likely to be present in the developing rather than developed countries. In this paper, we offer the first test of the hypothesis on a large developing and poor country, India, which has seen its economy grow 8 to 9 percent recently. We first generalize the Fair model to allow for multiple candidates instead for just two and then test it using crossstate data. We find quantitatively large and statistically robust effect of growth on the prospects of the candidates of the state incumbent parties to win elections. Specifically, we use the data on 422 candidates in the 2009 parliamentary elections and show that the candidates of incumbent parties in high-growth states have much better prospects of victory than those in low-growth states.

Suggested Citation

  • Gupta, Poonam & Panagariya, Arvind, 2011. "Growth and Election Outcomes in a Developing Country," Working Papers 11/92, National Institute of Public Finance and Policy.
  • Handle: RePEc:npf:wpaper:11/92
    Note: Working Paper 92, 2011
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    References listed on IDEAS

    as
    1. Adi Brender & Allan Drazen, 2008. "How Do Budget Deficits and Economic Growth Affect Reelection Prospects? Evidence from a Large Panel of Countries," American Economic Review, American Economic Association, vol. 98(5), pages 2203-2220, December.
    2. Alesina, A. & Rosenthal, H., 1989. "Moderating Elections," Working papers 537, Massachusetts Institute of Technology (MIT), Department of Economics.
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    Cited by:

    1. Dutta, Bhaskar & Gupta, Poonam, 2012. "How Do Indian Voters Respond to Candidates with Criminal Charges : Evidence from the 2009 Lok Sabha Elections," MPRA Paper 38417, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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