Growth and Election Outcomes in a Developing Country

With the exception Brander and Drazen (2008), who use a comprehensive cross-country database consisting of both developed and developing countries, the hypothesis that rapid growth helps incumbents win elections has been tested exclusively for the developed countries (e.g., Ray Fair 1978). But since sustained rapid growth offers the prospect of pulling vast numbers of the voters out of poverty within a generation, such an effect is far more likely to be present in the developing rather than developed countries. In this paper, the first test of the hypothesis is done for a large developing and poor country, India, which has seen its economy grow 8 to 9 percent recently. It is generalized that the Fair model to allow for multiple candidates instead for just two and then test it using crossstate data. The data is used on 422 candidates in the 2009 parliamentary elections and show that the candidates of incumbent parties in high-growth states have much better prospects of victory than those in low-growth states. [Working Paper No. 2011-92]. URL: [http://www.nipfp.org.in/newweb/sites/default/files/wp_2011_92.pdf].