Abstract:

The search for opportunism in government budgets is weakened by the absence of a strong reason for why spending increases should be restricted solely to the period leading into the next election. We argue that the need to fulfill a set of election platform promises in combination with the characteristic that some budget items better attract the attention of voters (with deteriorating memories) will lead to a predictable reallocation of budgetary spending across the life of a government. Our test uses capital expenditures as our example of more politically visible budgetary items and a data set of 14 Indian states over 54 years (1959/60 - 2012/13). The results are found to be consistent with this hypothesis and provide a fit with the data that is marginally better than more traditional models that use either all pre-election periods or only the pre-election year of scheduled elections to test for opportunism.

Biographical note:

Bharatee Bhushan Dash is an assistant professor at the National Institute of Public Finance and Policy (NIPFP), New Delhi. He received his Ph.D. in economic from the University of Hyderabad. He has published journal articles and working papers as author and co-author. His main research interests are in the areas of public finance, fiscal federalism, public choice, new political economy, and development economics. At the NIPFP, he has coordinated several training programmes on Public Economics and has worked on various projects sponsored by the Ministry of Health and Family Welfare, Government of India, and the Fourteenth Finance Commission of India. At present, he working on a project, sponsored by Social Sciences and Humanities Research Council (SSHRC), Canada, where the major objective is to study the nexus of governance-public policy-socioeconomic outcome in India.