Politicians face competing pressures when allocating public infrastructure: maximizing economic returns versus securing political support. I estimate the efficiency cost of political considerations in infrastructure allocation using quasi-experimental variation in canal placement across 224 villages in Gujarat, India. Exploiting close elections and politician-voter caste alignment as instrumental variables, I find that while politicians predominantly allocate canals to high-productivity villages, political targeting of opposition caste groups distorts this allocation at the margin. Approximately 14% of canals are misallocated for political reasons—either given to lower-productivity villages or withheld from high-productivity villages. Using a counterfactual simulation based on household production function estimates, I calculate that a purely productivity-maximizing allocation would increase aggregate agricultural output by an additional 12.6%, equivalent to 26.5 million kilograms annually. These findings quantify the trade-off between political incentives and economic efficiency in public infrastructure investment decisions, with implications for infrastructure policy in electoral democracies.

Evidence from the vast literature suggests that the decision-making power of females in the household plays an important role to ameliorate household welfare. We analyze the impact of having a bank account and the channels it triggers, which improves the female’s decision-making power in the household. In this study, we utilized the data from the SEPRI (2016) and JPM (2016) for 12 districts of the Uttar Pradesh state and use the 3SLS approach in our analysis. We concluded in this study that a female owning a bank account increases her share of household decision-making by 33.8%. Therefore, it helps in reducing the vulnerability of the household to fall below the poverty line.