Development or Rent Seeking? How Political Influence Shapes Public Works Provision in India

Abstract

ABSTRACTHow do politicians with influence over public works programs balance their incentives to gain electoral support with their proclivities for rent seeking? This article argues that government elites in parliamentary systems manage this trade-off by concentrating rent-seeking opportunities in their own hands while facilitating efficient public goods provision in the constituencies of their more junior partisan colleagues. Analyses using fine-grained data on road construction in India based on a variety of causal inference strategies support the argument. While ruling party legislators showed higher levels of road provision in their constituencies regardless of ministerial status, road projects in ministers’ constituencies showed higher levels of rent seeking than those in the constituencies of other ruling party legislators. Moreover, consistent with the mechanism, ruling party legislators’ diminished access to rent-seeking opportunities appears to be largely driven by the influence of co-partisan ministers. The findings illuminate how politicized distribution can sometimes mitigate inefficiencies in infrastructure provision.