Home Price Subsidies Increase Local-Level Political Participation in Urban India

Abstract

Home price subsidies are common in low- and middle-income countries. How do they affect an important input into local governance—namely, citizens’ propensity to make everyday demands or claims? I study the effects of a program in Mumbai, India, through an original survey of winners and nonwinners of program lotteries. Winning increases participants’ reported claims to improved services and knowledge of municipal government. It also changes policy preferences, even among those who rent out the homes. Transfers can thus generate active citizenship through many channels, including increased political capacity, improved perceptions of self-efficacy, expanded expectations of government, and changed motivations of recipients. They also create interest groups at the local level, where their actions can have both positive and negative externalities. The findings are among the first causally identified effects of policy on claim making; they add a new context and dependent variable to the literature on housing policy.