Building networks: Investigating the quid pro quo between local politicians & developers

55 Pages Posted: 29 Mar 2022 Last revised: 11 Jun 2023

See all articles by Vaidehi Tandel

Vaidehi Tandel

The University of Manchester

Sahil Gandhi

The University of Manchester

Alex Tabarrok

George Mason University

Multiple version iconThere are 2 versions of this paper

Date Written: March 5, 2022

Abstract

Mutually beneficial arrangements between politicians and real estate developers are common in many developing countries. We document what happens when the politician-developer nexus is disrupted by an election. We construct a novel dataset of real estate projects and electoral constituencies in Mumbai's municipal government. We find that an incumbent party losing the election increases real estate project completion times by 5%. We find no effect of quasi-random redistricting or changes in voter preferences on project delays. We investigate two mechanisms for the slowdown associated with party turnover -- delays in construction approvals around the time of the election and increase in litigation against projects after the election. While we see no rise in litigation, we find that delayed approvals near an election explain 23% of the increased total delays due to party change.

Keywords: Real Estate Markets, India, Elections

JEL Classification: D72; R30; O18

Suggested Citation

Tandel, Vaidehi and Gandhi, Sahil and Tabarrok, Alex, Building networks: Investigating the quid pro quo between local politicians & developers (March 5, 2022). Available at SSRN: https://ssrn.com/abstract=4050184 or http://dx.doi.org/10.2139/ssrn.4050184

Vaidehi Tandel

The University of Manchester ( email )

Oxford Road
Manchester, N/A M13 9PL
United Kingdom

Sahil Gandhi (Contact Author)

The University of Manchester ( email )

Booth St West
Manchester, N/A M15 6PB
United Kingdom

Alex Tabarrok

George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

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