Politics and local economic growth: evidence from India
Author(s)
Asher, Sam
Novosad, Paul
Type
Journal Article
Abstract
Political favoritism affects the allocation of government resources, but is it consequential for growth? Using a close election regression discontinuity design and data from India, we measure the local economic impact of being represented by a politician in the ruling party. Favoritism leads to higher private sector employment, higher share prices of firms, and increased output as measured by night lights; the three effects are similar and economically substantive. Finally, we present evidence that politicians influence firms primarily through control over the implementation of regulation.
Date Issued
2017-01-01
Date Acceptance
2017-01-01
Citation
American economic journal. Applied economics, 2017, 9 (1), pp.229-73
ISSN
1945-7782
Publisher
American Economic Association
Start Page
229
End Page
73
Journal / Book Title
American economic journal. Applied economics
Volume
9
Issue
1
Copyright Statement
Copyright American Economic Association; reproduced with permission of the American Economic Journal: Applied Economics
Publication Status
Published
Date Publish Online
2017-01-01