Political Economy of Infrastructure Spending in India
This paper examines a puzzle in the political economy of infrastructure in India -- the co-existence of relatively low shares of capital spending in public budgets alongside evidence of large demand for village infrastructure from poor voters. It a...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100916114657 http://hdl.handle.net/10986/3907 |
| Summary: | This paper examines a puzzle in the
political economy of infrastructure in India -- the
co-existence of relatively low shares of capital spending in
public budgets alongside evidence of large demand for
village infrastructure from poor voters. It argues that this
pattern is due to infrastructure projects being used at the
margin for political rent-seeking, while spending on
employment and welfare transfers are the preferred vehicles
to win votes for re-election. New suggestive evidence on the
variation of public spending composition across states, and
within states over time is offered that is consistent with
this argument. This evidence underscores a growing argument
in the development literature that the level and composition
of public spending per se may not be sufficient metrics to
assess the quality of public goods policies -- greater
infrastructure spending in some contexts may go to political
rents rather than to the actual delivery of broad public
goods for growth and poverty reduction. |
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