The Political Economy of Government Responsiveness: Theory and Evidence from India

The determinants of government responsiveness to its citizens is a key issue in political economy. Here, we develop a model based on the solution of political agency problems. Having a more informed and politically active electorate stregthens incentives for governments to be responsive. This suggests that there is role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reßected in policy. The ideas behind the model are tested on panel data from India. We show that state governments are more responsive to falls in food production and crop ßood damage via public food distribution and calamity relief expenditure where newspaper circulation is higher and electoral accountability greater. ∗We have received useful comments from two anonymous referees, Alberto Alesina, Oriana Bandiera, Ahbijit Banerjee, Steve Coate, Jean Dreze, Esther Dußo, Eliana la Ferrara, Maitreesh Ghatak, Torsten Persson, Andrei Shleifer, Guido Tabellini and a number of seminar and conference participants. We are grateful to STICERD for Þnancial support. Grace Wong and Berta Esteve-Volart provided excellent research assistance.