How Electoral Cycles Shape the Implementation of Public Works Programs: Evidence From India

Abstract

Why do public works programs in developing democracies often experience implementation failures at the local level? Building on the literature on political business cycles, our study sheds light on a key explanation. We argue that electoral cycles undermine the completion of public works projects because of incumbents’ difficulties in reaping electoral rewards for following through on projects proposed just prior to an election. Analyses based on project-level data from a nation-wide public program in India supports the argument. We find that projects proposed close to an upcoming election are less likely to be eventually completed than projects proposed at other times. We further find that incumbent turnover exacerbates the effect of electoral cycles and that this modifying effect is plausibly causal. The results suggest that new incumbents have reduced incentives to follow through on projects proposed by their predecessors due to the difficulties involved with claiming credit for such projects.