Electoral Goals and Center-State Transfers: A Theoretical Model and Empirical Evidence from India

By W. Arulampalam, S. Dasgupta, A. Dhillon, Bhaskar Dutta. Social Science Research Network, 2008

450 citations recorded by the source corpus.

We construct a model of redistributive politics where the central government is opportunistic and uses its discretion to make transfers to state governments on the basis of political considerations. These considerations are the alignment between the incumbent parties at the central and state levels and whether a state is a swing state or not. A testable prediction from the model is that a state that is both swing and aligned with the central government is especially likely to receive higher transfers. We test this prediction using Indian data for 14 states from 1974-75 to 1996-97. We find that a state which is both aligned and swing in the last state election is estimated to receive 16% higher transfers than a state which is unaligned and non-swing.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/46450bf8ee0ccc78adbbcbdbec00ffefb5474cb0

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Citations in the corpus

Politics and Local Economic Growth: Evidence from India (2017, background): “Arulampalam et al. (2009) find that center-to-state transfers in India are higher when state parties are aligned with the federal coalition.”
Distributive Politics Around the World (2013, methodology): “A similar research design is utilized by Arulampalam et al. (2009) in a study of transfers to Indian states by the central government.”
Intergovernmental Grants as Signals and the Alignment Effect: Theory and Evidence (2015, background): “Our approach is also in contrast to a “distributive politics” theory of intergovernmental grants due originally to Lindbeck and Weibull (1987), Dixit and Londregan (1995), and extended to a fiscal federalism setting more recently by Dixit and Londregan (1998) and Arulampalam et al. (2009).(7) This l”
Tying Your Enemy's Hands in Close Races: The Politics of Federal Transfers in Brazil (2012, background): “For India, Arulampalam et al. (2009) find that aligned states receive larger central transfers, especially if they are swing states.”