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 non-winners of program lotteries. Winning increases participants’ reported claims to improve services, knowledge about municipal government, and changes policy preferences, even among those who rent out the homes. Transfers can thus generate active citizenship through many channels including in- creased 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, and add a new context and dependent variable to the literature on housing policy.