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Political Determinants of the Allocation of Public Expenditures: A Study of the Indian States

  • Dash, Bharatee Bhusana

    ()

    (National Institute of Public Finance and Policy)

  • Raja, Angara V.

    ()

    (Dept. of Economics, University of Hyderabad)

This study examines whether the allocation of public expenditures of the Indian states are significantly influenced by government specific political characteristics. Three types of government specific characteristics are considered: forms of governments, ideology of the government, and the electoral cycle. A number of hypotheses are designed to link these characteristics with expenditure allocation. The hypotheses are tested using a panel dataset of 14 Indian states spread over 27 fiscal years, from 1980-81 to 2006-07. The overall findings of the study suggest that the relationship between expenditure allocation and political determinants across the Indian states validate the proposed hypotheses even after controlling for the traditional and other unobservable determinants. These findings are robust to various forms of sensitivity analyses.

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File URL: http://www.nipfp.org.in/newweb/sites/default/files/wp_2012_101.pdf
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Paper provided by National Institute of Public Finance and Policy in its series Working Papers with number 12/101.

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Length: 26
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:npf:wpaper:12/101
Note: Working Paper 101, 2012
Contact details of provider: Web page: http://www.nipfp.org.in

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  1. Wiji Arulampalam & Sugato Dasgupta & Amrita Dhillon & Bhaskar Dutta, 2008. "Electoral goals and center-state transfers: A Theoretical model and empirical evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-14, Indian Statistical Institute, New Delhi, India.
  2. Dollery, Brian E & Worthington, Andrew C, 1996. " The Empirical Analysis of Fiscal Illusion," Journal of Economic Surveys, Wiley Blackwell, vol. 10(3), pages 261-97, September.
  3. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
  4. Khemani, Stuti, 2007. "Does delegation of fiscal policy to an independent agency make a difference? Evidence from intergovernmental transfers in India," Journal of Development Economics, Elsevier, vol. 82(2), pages 464-484, March.
  5. Padovano, Fabio & Venturi, Larissa, 2001. " Wars of Attrition in Italian Government Coalitions and Fiscal Performance: 1948-1994," Public Choice, Springer, vol. 109(1-2), pages 15-54, October.
  6. repec:ner:tilbur:urn:nbn:nl:ui:12-3107371 is not listed on IDEAS
  7. Roberto Ricciuti, 2004. "Political Fragmentation and Fiscal Outcomes," Public Choice, Springer, vol. 118(3_4), pages 365-388, 03.
  8. Khemani, Stuti, 2004. "Political cycles in a developing economy: effect of elections in the Indian States," Journal of Development Economics, Elsevier, vol. 73(1), pages 125-154, February.
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