Speaker: Dr. Shabana Mitra, Indian Institute of Management, Bangalore

Date & Hour:31st August 2020, 04:00 pm

Title:Cash for Votes: Evidence from India

Abstract:

This paper investigates the prevalence of vote-buying in democratic elections where stringent restrictions on corporate donations to political parties exist. We combine data from state assembly elections in India with household-level consumer expenditure and employment surveys (conducted by NSSO) over the period 2004-11. Exploiting a difference-in-difference methodology, we estimate the effect elections have on the consumption of various household items: food, clothes, education-related, etc. Moreover, there is heterogeneity in such consumption adjustments across households. We also find that in the same period, though work days increase, total wages are falling. Our estimates suggest that legal sources of funds and a mere increase in economic activity are not sufficient for generating such “spikes” in consumption and indicate the role of the hidden economy in politic