Cash for votes: evidence from India on election financing and dynastic politics

Description

This paper investigates the prevalence of vote-buying in democratic elections characterized by stringent restrictions on corporate donations to political parties. Using data from state assembly elections in India, combined with household-level consumer expenditure surveys conducted by the National Sample Survey Office (NSSO) over the period 2004–2011, we analyze the effects of elections on household consumption patterns. Employing a difference-in-differences methodology, we estimate the impact of elections on the consumption of various categories of goods, including food, clothing, and education-related expenditures. The results reveal noticeable election-period spikes in household consumption, with significant heterogeneity across households. Our findings suggest that official or legal sources of campaign finance are insufficient to explain these consumption patterns, pointing instead to the role of informal or unaccounted financial flows in electoral processes.

Publication Date

1-1-2016

Keywords

Political economy, Election finance, Black economy

Conference

6th West Bengal Growth Conference, 28-29 December, 2016, West Bengal

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