Election cycles and electricity provision: Evidence from a quasi-experiment with Indian special elections

Abstract

We present evidence from India showing that state governments induce electoral cycles in electricity service provision. Our data and research strategy allow us to build on models of political business cycles and targeted distribution in two important ways. First, we demonstrate that by manipulating the flow of critical inputs into economic activity like electricity, elected leaders can influence economic outcomes even in contexts where they have constrained fiscal capacity. Second, we identify the effect of elections on electricity provision by focusing on special elections held for exogenous reasons. Our results show that state governments induce substantive increases in electricity service to constituencies that hold special elections. Manipulation of the power supply is stronger in contested constituencies and during special elections held in states where the government commands only a small majority. Overall, we find no evidence of positive welfare effects from the electoral manipulation of electricity supply. (C) 2015 Elsevier B.V. All rights reserved.