Essays on political economy and development

Abstract

This thesis includes three papers. In the first paper, I use a close election regression discontinuity design to study the development effects of political alignment between local legislative constituency representatives and state governments in India. I assemble a comprehensive annual dataset on India at a fine geographic unit and find that aligned politicians have lesser growth of visible long-term investment goods, although aligned constituencies do not get less of some other variables. In the second paper, I study the consequences as well as determinants of formation of new districts and district headquarters in the Indian context. There is evidence of an increased growth (or reorganization) of economic activity around newly formed district headquarters. However, the evidence of an effect on the entire district is mixed. In the third paper, I find a negative relationship between size of political constituencies and the various variates pertaining to the Mahatma Gandhi National Rural Guarantee Scheme in India. The results are consistent with a simple theory of maximization of electoral prospects by electorally motivated government where the citizens' total demand from the government is not significantly increasing in the size of the electorate.