2017 Discussion papers
School of Economics Discussion Paper 17/11
Cash for Votes: Evidence from India
Anirban Mitra, University of Kent
Shabana Mitra and Arnab Mukherji, Indian Institute of Management Bangalore.
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 surveys (conducted by NSSO) over the period 2004-11. Exploiting a diﬀerence-in-diﬀerences methodology, we estimate the eﬀects elections have on the consumption of various household items: food, clothes, education-related, etc. Moreover, there is heterogeneity in such consumption adjustments across households. Our estimates suggest that legal sources of funds are not suﬃcient for generating such “spikes” in consumption and indicate the role of the hidden economy in politics.
JEL Classification: D12; D72; H40
Keywords: Political economy; election ﬁnance; black economy
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