Politicians and Local Economic Growth: Evidence from India

74 Pages Posted: 21 Jul 2016

See all articles by Sam Asher

Sam Asher

World Bank Development Research Group (DECRG)

Paul Novosad

Dartmouth College

Date Written: February 1, 2016

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.

JEL Classification: O12, D16, P72

Suggested Citation

Asher, Sam and Novosad, Paul, Politicians and Local Economic Growth: Evidence from India (February 1, 2016). Available at SSRN: https://ssrn.com/abstract=2811187 or http://dx.doi.org/10.2139/ssrn.2811187

Sam Asher

World Bank Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://samuelasher.com

Paul Novosad (Contact Author)

Dartmouth College ( email )

Department of Sociology
Hanover, NH 03755
United States

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