Delhi Political Economy Workshop Series, Winter Edition, 2021
Venue: Zoom
Workshop Schedule
Date: February 25th (Thursday), 2021 (all times are in IST)
5:00 PM - 6:00 PM: Age, Inequality and the Public Provision of Healthcare by Anirban Mitra (University of Kent)
Abstract: How does economic inequality affect public spending on healthcare in democracies? Does this depend upon the demographic composition of the electorate? We build a multi-dimensional model of political decision-making with endogenous political parties to analyse such questions. Voters in our model differ in terms of income and age. The tax rate, the allocation of the revenue between income redistribution and two forms of public spending -- healthcare and capital investment -- are determined through political competition. All agents value healthcare equally but the young like capital investment more than the old do. Public healthcare consumption can be supplemented by purchases from the private market. We find that when the young are a majority, public healthcare spending tends to be lower on average than when the young are a minority. Moreover, when the old are a majority the equilibrium public healthcare provision depends critically upon the extent of income inequality. We also discuss implications regarding the on-going demographic transition (population aging) and the Covid-19 pandemic.
6:00 PM - 7:00 PM: The Newsroom Dilemma by Ayush Pant (Ashoka University)
Abstract: Conventional wisdom suggests that competition in the modern digital environment pushes media outlets towards the early release of less accurate information. We show that this is not necessarily the case. We argue that two opposing forces determine the resolution of the speed-accuracy tradeoff: preemption and reputation. More competitive environments may be more conducive to reputation building. Therefore, it is possible to have better reporting in a more (Internet-driven) competitive world. However, we show that the audience may be worse-off due to another consequence of the Internet -- outlets' better initial information. Finally, we show how a source may exploit the speed-accuracy tradeoff to quickly get "unverified facts'' out to the audience.
7:00 PM - 8:00 PM: The Politics of Drought Relief: Evidence from Southern India by Lisa Tarquinio (Boston University)
Abstract: A core function of government is to provide assistance to households affected by negative shocks. This paper studies such government intervention in the form of drought relief in three Indian states. I demonstrate that states' targeting of relief only partly aligns with environmental measures of drought. Furthermore, targeting does not adhere to national guidelines for allocating drought relief. Instead, allocations are disrupted by the political motivations of the state ruling party. The likelihood of an area receiving relief increases in the electoral competition faced by the ruling party while political alignment with the ruling party reduces the likelihood of receiving relief. A dynamic probabilistic voting model explains these results. I confirm that the associations I report reflect a causal relationship by utilizing an instrumental variables approach and regression discontinuity design. I further demonstrate that drought relief is associated with a greater increase in agricultural output if appropriately targeted, suggesting that relief is in fact misallocated.
Date: February 26th (Thursday), 2021 (all times are in IST)
6:00 PM - 7:00 PM: Educated Leaders through Legislation, But at what Cost? by Rolly Kukreja (ISI Delhi)
Abstract: Many societies design incentives and restrictions to improve the quality of their political leaders. In South Asia, there have been attempts to do so by mandating minimum education requirements. These have been criticised publicly on grounds that they can potentially exclude disadvantaged groups (females, ethnic groups-caste) when such restrictions are in place. In this paper, we look at the impact of such restrictions on the selection of leaders, even after they are withdrawn. We use the context of local village council elections in Rajasthan where a legislation mandating minimum education requirements was introduced in 2014 but subsequently withdrawn in 2019. We show that where such a legislation had a potentially larger effect on the existing pool of candidates, there was a larger probability of under-representation of disadvantaged groups in 2020, even though the election was not subject to restrictions. The negative impact on electing female leaders remain, even if we control for the increasing education of the elected leader over time. Our results are robust to accounting for differential trends for mean reversion of education as well as account for the age distribution of population.
7:00 PM - 8:00 PM: Residential Segregation and Unequal Access to Public Goods in India by Sam Asher (Johns Hopkins University)
Abstract: Economists have long studied the role of location in shaping the economic opportunities available to households and firms. There is a particularly rich literature in rich countries, particularly the US, on how segregation along ethnic lines affects access to public goods, jobs, and other economic outcomes. Yet despite much work on ethnic disparities and tensions in lower income countries, there is little quantitative work on segregation. In this paper, we study residential patterns and economic outcomes for India's two largest marginalized groups (MGs): Scheduled Castes and Muslims. We assemble a novel dataset of neighborhood-identified microdata on households and public goods for 7000 urban and rural areas. We establish three primary new facts by studying outcomes at both the neighborhood and city/subdistrict levels. First, the government provides fewer health and educational facilities to neighborhoods with higher MG shares. Second, households in high MG share neighborhoods are poorer than comparable households elsewhere, and more so when they belong to these MGs. Third, high segregation cities and subdistricts are poorer and provide fewer public goods to MGs than low segregation areas.
Delhi Political Economy Workshop Series, Winter Edition, 2020
Date: February 22nd (Saturday), 2020
Venue: Auditorium, Indian Statistical Institute, 7 SJS Sansanwal Marg, Katwaria Sarai, New Delhi - 110016
Workshop Schedule
9:30 AM - 9:45 AM: Tea and Snacks
9:45 AM - 10:45 AM: Does Political Representation affect Trust in Political Institutions? Evidence from India by Rolly Kukreja (ISI Delhi)
Abstract: The role of political institutions in the distribution of economic resources and economic development is well acknowledged, but less is known about the determinants and importance of trust in political institutions. This paper studies the impact of change in representation on political trust. I use the delimitation exercise of 2008 as a source of change in representation of districts at state legislatures and respondents’ self-reported confidence in politicians and state government from two rounds of the IHDS (India Human Development Survey) as measures of political trust. Implementing a difference-in-differences strategy with a household panel, the estimates show that households living in districts that gained representatives in the state legislative assembly show an improvement in reported confidence in both politicians and the state government. There is no evidence of a symmetric negative effect for households living in districts that lose seats. Further, this increase in confidence is associated with an improvement in rural infrastructure and accompanied by an increase in voter turnout in gaining districts.
10:45 AM - 11:45 AM: Vote Buying: Evidence from a Voter Survey in India by Shabana Mitra (IIM Bangalore)
Abstract: Clientelism and vote-buying are pervasive in many developing countries and arguably reduce public good investments and therefore hamper growth and development. However, the current literature leaves open many questions that could be answered through careful empirical work. We conducted a detailed survey to reliably quantify the incidence of vote-buying in one of the largest democracies in the world. Immediately after the 2018 state elections in Madhya Pradesh we conducted a survey of 10,000 voters across the 50 most competitive constituencies. We find that 44% percent households reported that cash or gifts were offered in return for their votes in their villages. This indicates that there is targeted distribution of funds and not a helicopter drop. 24% of all households surveyed reported that cash was distributed in their village. We also asked the individual as to who it was that had distributed the items or cash to them. Nearly 50% reported that the vote buying offers were made by individuals from within their own village – suggesting that local individuals act as “intermediaries” in the vote-buying process. We also asked individuals if they had to promise in anyway to vote for a particular individual or party in lieu of the transfer to them. Most of the individuals responded in the negative. We further asked if they expected any harm to come their way if they did not vote for the candidate offering the incentives, and 70% of the sample believed that there are no repercussions. Regarding the effectiveness of cash transfers in change voting pattern, we find that 60% of voters still vote for the same party as they had planned to irrespective of cash transfers.
11:45 AM - 12 PM - Tea Break
12 PM - 1 PM: Land Acquisition, Civil Society and Protest by Abhinandan Sinha (ISI Kolkata)
Abstract: This paper provides a theoretical analysis of civil society activism and development. In a one period static model, the Government of a backward agricultural economy acquires some land for an industrialization project, in exchange of compensation. If land is forcefully acquired from some unwilling landowners, civil society activists protest. High protests may dislodge the project. Non strategic activists are ideological and play the behavioral role of protesters. Strategic activists can support either the Government or the protest, depending on their perception of the possible winner. We find that ideological activists increase the compensation of land losers, where as strategic activists increase the chances of project’s success. Political competition leads to any one of the party, Incumbent or Opposition, to engage in political campaign, depending on the difficulty to dislodge the project. Our protest model built using Global Games is a general one where land acquisition comes only as a context. Our model can be helpful to analyze other contexts as well.
2:30 PM - 3:30 PM: Electoral Cycle in Public Goods Provision: Evidence from India by Ahana Basistha (ISI Delhi)
Abstract: The fact that there is a rise in government spending before elections, more commonly known as electoral cycle in the literature, has long preoccupied scholars. In this paper, we investigate the presence of a similar political manipulation by the state governments, in terms of pre-electoral intervention in the provision of a nationwide road building program (Pradhan Mantri Gram Sadak Yojna, PMGSY in short), which certainly is of importance to scholars and the public, in general. For this purpose, we generate a new dataset whereby we match close to 150,000 PMGSY roads for 18 large Indian states to census villages, which are then linked to assembly constituencies using the Geographic Information System (GIS). We find that while there is a strong presence of electoral cycle and evidence of political interference, the pre-election increase in outcomes is not necessarily accompanied with a corresponding decline in the quality of service. We argue that if anything, the pre-election scrutiny by public improves the delivery of PMGSY in several fronts, which affects welfare positively. We consider several alternative scenarios under which increased corruption on the year before an election might be at play, but we are able to successfully reject these cases after considering the direction of several indicators on price and quality.
3:30 PM - 3:45 PM: Tea Break
3:45 PM - 4:45 PM: (No) Strength in Numbers? A Model of Collective Action with “Anonymity Concerns” by Sabyasachi Das (Ashoka University)
Abstract: In many collective action contexts (such as protests, riots, gang wars), the marginal cost of participation for an individual is lower when other group members participate more, i.e., when the individual is more anonymous. Existing models of collective action do not consider this feature of participation that we refer to as “anonymity concern.” We show that in presence of anonymity concerns, the aggregate participation of a group is decreasing in group size - a phenomenon known as the Group Size Paradox or GSP, even when the prize is a public good. We further show that GSP arises in about half of the parameter space when we allow the cost of participation to be arbitrarily convex. We argue that this goes against the received wisdom of the literature which finds that GSP would not occur in contests involving either a public prize or sufficiently convex cost of effort or both. Our result therefore highlights that extreme free-riding is more pervasive in collective action than was previously understood.
Delhi Political Economy Workshop, Summer Edition, 2019
Date: August 23rd (Friday), 2019
Venue: Conference Room, Indian Statistical Institute, 7 SJS Sansanwal Marg, Katwaria Sarai, New Delhi - 110016
Workshop Schedule
10:30 AM - 10:45 AM: Tea/Snacks
10:45 AM - 11:45 AM: Electoral Cycles in Food Prices: Evidence from India by Aaditya Dar (ISB)
Abstract: Do prices of essential food commodities vary with the timing of elections? Using weekly retail price data of 16 food items between 1993 and 2012 in 28 cities across India, we find existence of a `political price cycle' in onions and not in other commodities, confirming a commonly held (but hitherto empirically untested) view that onion prices are an electorally salient issue. There is suggestive evidence that the opportunistic cycles are strongest when: (a) incumbent state governments are aligned with the center, (b) incumbent state governments win with large majorities, and (c) in periods when the market is unregulated. The findings can be explained by the role of informal regulatory strategies such as collusion between incumbent governments and trading cartels, who exercise significant influence in the market supply of onions.
11:45 AM - 12 PM - Tea Break
12 PM - 1 PM: Do Synchronised Elections Matter? Evidence from India by Apurav Yash Bhatiya (University of Warwick)
Abstract: Elections for various tiers of government are conducted at different intervals to ensure accountability and legitimacy. While increasing electoral costs and inefficient governance have become dominant themes providing a compelling rationale for some countries to enable synchronised elections, its electoral implications remain unknown. We answer this question by exploiting natural variation in the Indian national and state electoral cycles between 1977-2018. We find that the probability that the same political party wins a parliamentary constituency (PC) and a state assembly constituency (within the PC) increases by 0.096 (22% on a base probability of 0.42) when the national and state elections happen on the same day rather than at different points in time. These synchronised and unsynchronised elections remain no different in terms of turnout and victory margin. We document a reduction in split-ticket voting when elections are synchronised which can potentially explain the result.
2:30 PM - 3:30 PM: Economic Ties and Social Capital: Evidence from Self-Help Groups in India by Ashwini Deshpande (Ashoka University)
Abstract: Based on data from a large primary survey conducted in ten poorest rural districts of the state of Maharashtra in India, this paper investigates if the creation of economic ties can lead to the creation or enhancement of social capital. The existing international literature finds mixed evidence on the ability of SHGs or microcredit programs to improve livelihoods. Using entropy balancing and propensity score matching methods, we find that participation in self-help groups had little impact on livelihoods, but led to the creation of significant social capital, as measured by indicators related to personal efficacy and collective action. We argue that the social capital generated by the programme is a significant positive impact (even though the main target of the programme was livelihoods), as it strengthens the process of women's empowerment.
3:30 PM - 3:45 PM: Tea Break
3:45 PM - 4:45 PM: Informed Citizens and Political Entry: Evidence from a Large Education Programme in India by Abhishek Chakravarty (University of Manchester)
Abstract: We exploit a national school-building programme across India to examine whether increased access to education with accompanying increased involvement in programme implementation also increased citizens' entry into electoral politics in following years. We find that the programme significantly increased educational attainment among cohorts exposed to the programme during school-going age, with women seeing the largest gains. Treated constituencies also see 5-8% increase in the number of contesting candidates in subsequent state assembly elections. The additional candidates are overwhelmingly independents rather than from established political parties, and are also nearly all men, thus further widening the large existing gender gap in political representation in India.