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Paper No' DEDPS 16: | Full paper
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Keywords: Political economy; minorities; electoral law; India; panel data.
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This Paper is published under the following series: Development Economics
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Abstract:Disadvantaged groups tend also to constitute population minorities. One consequence of this is that the policies implemented by electorally accountable governments often fail to reflect minority interests. A policy solution is to enhance the political power of minority groups as a vehicle for promoting their policy interests. This paper analyzes the success of an electoral law, which does so by reserving seats for minority groups in legislatures, in promoting minority interests. The paper develops a theoretical model of the political process to analyze the policy impact of such a law. The key theoretical assumption, that candidates cannot commit to policies, implies that identity is relevant to policy choices. The analysis identifies economic reasons why this may lead parties to never field minority candidates. In such cases the model predicts that an electoral law of political reservation will influence policies. The paper takes advantage of the existence of such a law in India to test this prediction empirically. The principal finding is that minority representation has increased transfers to minorities. This suggests that political representation is central to the design of strategies that aim at promoting minority interests. More generally, the results indicate that legislator identity influences policies, and provide some support for the contention that politicians cannot fully commit to policies.
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