Local Funds and Political Competition: Evidence from the National Rural Employment Guarantee Scheme in India

摘要: This paper examines how local politics affects public fund allocations. It uses the context of National Rural Employment Guarantee Scheme (NREGS) in India which was introduced by Indian Congress (INC). Using longitudinal data on funds sanctioned and election results from three rounds elections Rajasthan, a state India, we find an inverted U-shaped relationship between existing vote share INC subsequent allocations at block level. To address issue endogeneity, instrument shares their lagged values. The using only close are however distinct as higher allocated to blocks where has lower share. We give evidence mechanism highlights role political representative sanctioning process. Further, show that strategy beneficial gaining