蝌蚪网 Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Fixing Market Failures or Fixing Elections? Agricultural Credit in India
蝌蚪网 Journal: Applied Economics
(pp. 219–50)
Abstract
This paper integrates theories of political budget cycles with theories of tactical electoral redistribution to test for political capture in a novel way. Studying banks in India, I find that government-owned bank lending tracks the electoral cycle, with agricultural credit increasing by 5-10 percentage points in an election year. There is significant cross-sectional targeting, with large increases in districts in which the election is particularly close. This targeting does not occur in nonelection years or in private bank lending. I show capture is costly: elections affect loan repayment, and election-year credit booms do not measurably affect agricultural output. (JEL D72, O13, O17, Q14, Q18)Citation
Cole, Shawn. 2009. "Fixing Market Failures or Fixing Elections? Agricultural Credit in India." 蝌蚪网 Journal: Applied Economics 1 (1): 219–50. DOI: 10.1257/app.1.1.219Additional Materials
JEL Classification
- D72 Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- Q14 Agricultural Finance
- Q18 Agricultural Policy; Food Policy