Electoral Accountability and the Natural Resource Curse: Theory and Evidence from India

42 Pages Posted: 11 Jul 2016 Last revised: 2 Oct 2018

See all articles by Amrita Dhillon

Amrita Dhillon

University of Warwick - Department of Economics

Pramila Krishnan

University of Oxford - Department of Economics

Manasa Patnam

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

Carlo Perroni

University of Warwick - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: July 2016

Abstract

Does secession yield economic dividends for natural resource rich regions? We exploit the formation of new Indian states in 2001 to uncover the effects of political secession on the comparative economic performance of natural resource rich and natural resource poor areas. We show that resource rich areas fare comparatively worse within the new states. Since the management and control of extraction rights in the Indian context resides with state-level institutions, we argue that these patterns reflect effects of political reorganisation on the quality of state governance in relation to natural resources. We describe a model of collusion between state politicians and local natural resource rent recipients that can account for the relationships we see in the data on how natural resource abundance shapes post-breakup local economic outcomes.

Keywords: Fiscal Federalism, Natural Resources and Economic Performance, Political Secession

JEL Classification: D72, H77, O13

Suggested Citation

Dhillon, Amrita and Krishnan, Pramila and Patnam, Manasa and Perroni, Carlo, Electoral Accountability and the Natural Resource Curse: Theory and Evidence from India (July 2016). CEPR Discussion Paper No. DP11377. Available at SSRN: https://ssrn.com/abstract=2807788

Amrita Dhillon (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
+44 1 20 352 3032 (Phone)

Pramila Krishnan

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

Manasa Patnam

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Carlo Perroni

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
44 24 7652 8416 (Phone)
44 24 7652 3032 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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