Political competition, public goods provision and project implementation
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This thesis evaluates the effect of electoral competition on governance along three dimensions: choice of public good projects, performance of bureaucrats, and quality of bureaucrats. The first chapter examines how electoral competition affects bureaucrats' performance in implementing policies chosen by politicians. There are two competing mechanisms: re-election concerns and access to long term incentives. To isolate these mechanisms, a unique dataset from India is constructed by matching details of bureaucrats' work histories with public good projects under the Member of Parliament Local Area Development (MPLAD) scheme. The main results show that bureaucrats approve projects faster when the incumbent politician's probability of winning is higher. Moreover, bureaucrats perform better when they are up for promotion and when they know that the politician is likely to be in office at the time of promotion. These findings suggest that access to dynamic incentives is the dominant mechanism through which political competition affects bureaucrats' performance. The second chapter examines the role of electoral pressures on the type of local public good projects chosen by politicians. The analysis proceeds in two steps: firstly, a nationally representative household survey from India is used to investigate the effect of wealth on the types of projects demanded by households. Secondly, a project-level dataset for local public goods provided under the MPLAD scheme is constructed to compare the allocation decisions of politicians. The identification strategy takes advantage of an information shock that occurred as a result of electoral redistricting in India and changed the probability of winning for incumbents. The results confirm the elite capture hypothesis: in the absence of electoral pressures, politicians are more likely to spend on projects that are desired by the rich. The third chapter examines the effect of electoral competition on politician's incentives in influencing the assignment of bureaucrats across administrative districts. Bureaucrats can be of two types: technocrats who are efficient in performing various tasks, and loyalists who execute policies according to the wishes of the politicians. Politicians in high competition constituencies have a greater incentive to choose technocrats as their better performance can help them get re-elected. This hypothesis is tested using data from India.