Consensus Democracy and State Performance: Evaluating the Impact of Coalition Government on Indian States

The question of whether a majoritarian setup is optimal in terms of broad representation takes up on paramount importance in the context of power-sharing in deeply divided places, whereby unqualified exclusion of segment(s) of the population from government can have potentially disastrous consequences. Governance in deeply-divided places presents a rather intriguing question --who governs the people, how are they elected, what mandates do they have? What form of government works best a single-party majoritarian system that by popular belief leads to more effective governance or a consensus-based government that allows for better protection of minority interests? More broadly then, is inclusion and participation in government more important in present-day deeply-divided societies than effective and efficient governance? These questions have attracted a lot of attention in the field of consensual democracy as theorists evaluate the possible trade-off between effective governance and broad participation. Proponents of majoritarianism tend to argue that coalition governments lead to ineffectual governance as compromise and negotiation become key. But does this argument work in deeply-divided societies where exclusion from government can lead to biased and potentially disastrous, flawed policies? This paper evaluates the impact of the form of government (single-party versus coalition cabinet) at the sub-national level in the context of Indian provinces by studying state performance through four lenses, namely, economic growth, social sector expenditure, number of Hindu-Muslim riots, and number of crimes committed against Scheduled Castes and Scheduled Tribes (SC/ ST). By running multivariate panel regressions on data from fifteen Indian states over a thirty year time period (1981-2010), it argues that majoritarian governments do not outperform consensual governments on measures of economic growth and civil peace. Instead, it appears that multi-party coalition governments in the context of Indian provinces have had a favorable impact on key aspects of democracy. Perhaps, coalition governments do provide the best of both worlds in deeply-divided societies.