Just Rewards? Local Politics and Public Resource Allocation in South India

This paper uses data on elected village councils in South India to examine the political economy of public resource allocation. We find that the pattern of policy-making reflects politicians’ self-interest. Elected councillors benefit from improved personal access to public resources. In addition, the head councillor’s group identity and residence influences public resource allocation. While electoral incentives do not eliminate politician opportunism, voters appear able to use their electoral clout to gain greater access to public resources. ∗We thank Lupin Rahman, Radu Ban, Siddharth Sharma and Jillian Waid for research assistance, and IMRB staff for conducting the survey. We are grateful to Penny Goldberg, Dominic Leggett, Chris Udry and seminar audiences at Berkeley, Georgetown, NBER, Oxford, Yale and at a meeting of the CIFAR Institutions, Organizations and Growth program for comments, and to the World Bank’s Research Committee and the South Asia Rural Development Unit for financial support. The opinions in the paper are those of the authors and do not necessarily reflect the points of view of the World Bank or its member countries.