Events
Seminar
Private versus Public Government Goods:Targeted Spending, Swing Voters and Electoral Competition across India’s States
Speaker
Dr. Stanley L. WinerEvent date
गुरू, 7 जनवरीVenue
Ground floor Conference Hall, R&T building, National Institute of Public Finance and Policy, New DelhiAbstract
In this paper we argue that the composition of Indian state government expenditures, particularly the ratio of private goods publicly provided used to target swing voters and special interest as a proportion of total state expenditures, is a decreasing function of real per capita income and the level of political competition (holding constant other demographic and cultural influences). These hypotheses are then tested on a panel of 14 Indian states over the fiscal years 1987/88 to 2011/12. The long run results of three alternative ARDL models are broadly consistent with the proposed hypotheses, particularly the relationship between the private good share of state expenditures and real per capita incomes. They suggest that rising incomes and more effective political competition work together to improve a state’s policy mix and to the extent that general welfare enhancing policies prove effective, economic growth and development becomes at least partially endogenous.