Quid Pro Quo: Builders, Politicians, and Election Finance in India - Working Paper 276 : Center for Global Development : Publications

<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head><script type="text/javascript" src="https://web-static.archive.org/_static/js/bundle-playback.js?v=7YQSqjSh" charset="utf-8"></script> <script type="text/javascript" src="https://web-static.archive.org/_static/js/wombat.js?v=txqj7nKC" charset="utf-8"></script> <script>window.RufflePlayer=window.RufflePlayer||{};window.RufflePlayer.config={"autoplay":"on","unmuteOverlay":"hidden"};</script> <script type="text/javascript" src="https://web-static.archive.org/_static/js/ruffle/ruffle.js"></script> <script type="text/javascript"> __wm.init("https://web.archive.org/web"); __wm.wombat("http://cgdev.org/content/publications/detail/1425795","20120108152346","https://web.archive.org/","web","https://web-static.archive.org/_static/", "1326036226"); </script> <link rel="stylesheet" type="text/css" href="https://web-static.archive.org/_static/css/banner-styles.css?v=p7PEIJWi" /> <link rel="stylesheet" type="text/css" href="https://web-static.archive.org/_static/css/iconochive.css?v=3PDvdIFv" />  <meta http-equiv="Content-type" content="text/html; charset=UTF-8"/> <title>Quid Pro Quo: Builders, Politicians, and Election Finance in India - Working Paper 276 : Center for Global Development : Publications</title> <meta name="description" content="Independent research and practical ideas for global prosperity."/> <meta name="keywords" content=""/> <meta name="copyright" content="Center for Global Development"/> <link rel="icon" href="/web/20120108152346im_/http://cgdev.org/images/cgd_favicon.gif" type="image/gif"/> <link rel="stylesheet" type="text/css" href="/web/20120108152346cs_/http://cgdev.org/layout/style.css"/>    <link rel="stylesheet" type="text/css" href="/web/20120108152346cs_/http://cgdev.org/jquery/thickbox/thickbox.css"/> <script type="text/javascript" src="/web/20120108152346js_/http://cgdev.org/jquery/jquery-1.3.2.min.js"></script> <script type="text/javascript" src="/web/20120108152346js_/http://cgdev.org/jquery/thickbox/thickbox.js"></script> <script type="text/javascript"> jQuery(function() { jQuery("#home-blog ul").each(function() { jQuery(this).find("li:first a").css({"font-size": "17px", "font-weight": "bold"}); jQuery(this).find("li:last").css({"border-bottom": "0"}); }); jQuery("#sidebar ul").each(function() { jQuery(this).find("li:first a").css({"font-size": "14px", "font-weight": "bold"}); jQuery(this).find("li:last").css({"border-bottom": "0"}); }); jQuery("#home-in-the-news li:first a").css({"font-size": "17px", "font-weight": "bold"}); jQuery("#home-in-the-news li:last").css({"border-bottom": "0"}); jQuery("#home-multimedia li:first a").css({"font-size": "17px", "font-weight": "bold"}); jQuery("#home-multimedia li:last").css({"border-bottom": "0"}); jQuery(".tab").click(function() { jQuery(this).parent().find(".tab").removeClass("active"); jQuery(this).parent().parent().find(".tab-box").hide(); var active_box = jQuery(this).attr("rel"); jQuery(this).parent().parent().find(".tab-box."+active_box).show(); jQuery(this).addClass("active"); }); }); </script> </head> <body class="content publications detail 1425795"> <div id="header"> <div id="header-inner"> <table cellpadding="0" cellspacing="0" style="width:100%"> <tr> <td width="185"> <a href="/web/20120108152346/http://cgdev.org/"><img src="/web/20120108152346im_/http://cgdev.org/layout/cgd-logo.png" alt="CGD"/></a> </td> <td valign="bottom"> <div id="tagline">Independent research & practical ideas for global prosperity</div> </td> <td align="right"> <div id="header-nav"> <a style="font-weight: normal;" href="/web/20120108152346/http://cgdev.org/section/about/">About Us</a>   |   <a style="font-weight: normal;" href="/web/20120108152346/http://cgdev.org/section/about/onthehill/">On the Hill</a>   |   <a style="font-weight: normal;" href="/web/20120108152346/http://cgdev.org/section/about/presscenter/">Press Center</a>   |   <a style="font-weight: normal;" href="/web/20120108152346/http://cgdev.org/section/about_enews/">Subscribe</a>   |   <a style="font-weight: normal;" href="/web/20120108152346/http://cgdev.org/section/about/donate/">Invest</a> </div> <div id="search-bar"> <form method="get" action="/web/20120108152346/http://cgdev.org/section/search"> <input name="q" id="search-input" value="Search" onclick="this.value=''"/> <input type="submit" id="search-btn" value=""/> </form> </div> </td> </tr> </table> </div> </div> <div id="navbar"> <div id="navbar-inner"> <ul id="topnav"> <li class="nav_home"> <a href="/web/20120108152346/http://cgdev.org/" class="nav_item"><span>Home</span></a> </li> <li class="nav_topics"> <a href="/web/20120108152346/http://cgdev.org/section/topics" class="nav_item"><span>Topics</span></a> <div class="menu"> <ul class="sub_nav"> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/aid_effectiveness">Aid Effectiveness</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/capitalflows">Capital Flows/Financial Crises</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/climate_change">Climate Change</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/debt">Debt Relief</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/economicgrowth">Economic Growth</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/education">Education</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/finance">Finance</a></li> </ul> <ul class="sub_nav"> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/food_and_agriculture">Food and Agriculture</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/fragile_states">Fragile States</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/global_health">Global Health Policy</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/globalization">Globalization</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/governance">Governance/Democracy</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/inequality">Inequality</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/ifi">International Financial Institutions</a></li> </ul> <ul class="sub_nav"> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/migration">Migration and Development</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/population">Population and Development</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/poverty">Poverty</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/privateinvest">Private Investment</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/regions">Regions</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/technology">Technology</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/trade">Trade</a></li> <div class="clear"> </div> </div> </li> <li class="nav_initiatives"> <a href="/web/20120108152346/http://cgdev.org/section/initiatives" class="nav_item"><span>Initiatives</span></a> <div class="menu"> <ul class="sub_nav"> <li><a style="color: #FFFFFF;font-weight: bold;" href="https://web.archive.org/web/20120108152346/http://www.cgdev.org/section/initiatives">Active Initiatives</a></li><hr style="margin: 0 0 8px 0;"> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/cdi">2011 Commitment to Development Index</a></li> <li><a target="_new" href="https://web.archive.org/web/20120108152346/http://www.carma.org/">Carbon Monitoring for Action (CARMA)</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/codaid">Cash on Delivery (COD) Aid</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/drugresistanceglobalhealth">Combating Drug Resistance</a></li> </ul> <ul class="sub_nav"> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/forestmonitoringforactionforma">Forest Monitoring for Action (FORMA)</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/migration_data_commission">Improving Migration Data</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/migration_tool_disaster_recovery">Migration as a Tool for Disaster Recovery</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/revenues_distribution">Oil-to-Cash: Fighting the Resource Curse through Cash Transfers</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/pakistan">Pakistan: U.S. Development Strategy in Pakistan</a></li> </ul> <ul class="sub_nav"> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/preventingodiousobligations">Preventing Odious Obligations</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/reformingtradepreferences">Reforming Trade Preferences</a></li> <li><a href="/web/20120108152346/http://cgdev.org/section/initiatives/_active/assistance">Rethinking U.S. Foreign Assistance</a></li> <hr style="margin: 8px 0 0 0;"> <li><a style="color: #FFFFFF;font-weight: bold;" href="https://web.archive.org/web/20120108152346/http://www.cgdev.org/section/initiatives?itype=completed">Completed Initiatives</a></li> <div class="clear"> </div> </div> </li> <li class="nav_publications selected"> <a href="/web/20120108152346/http://cgdev.org/section/publications" class="nav_item"><span>Publications</span></a> </li> <li class="nav_blogs"> <a href="/web/20120108152346/http://cgdev.org/section/opinions/blogs" class="nav_item"><span>Blogs</span></a> </li> <li class="nav_experts"> <a href="/web/20120108152346/http://cgdev.org/section/experts" class="nav_item"><span>Experts</span></a> </li> <li class="nav_events"> <a href="/web/20120108152346/http://cgdev.org/section/events" class="nav_item"><span>Events</span></a> </li> <li class="nav_teach_learn"> <a href="/web/20120108152346/http://cgdev.org/section/for_educators" class="nav_item"><span>For Educators</span></a> </li> <li class="nav_opinions"> <a href="/web/20120108152346/http://cgdev.org/section/impact" class="nav_item"><span>Impact</span></a> </li> </ul> </div> </div> <div id="container"> <div id="breadcrumb"> <div style="float:right"> <a href="javascript:print()"><img style="vertical-align:bottom" src="/web/20120108152346im_/http://cgdev.org/layout/icon-print.png" title="Print" alt="Print"/> Print</a>     <a class="a2a_dd" href="https://web.archive.org/web/20120108152346/http://www.addtoany.com/share_save"><img src="https://web.archive.org/web/20120108152346im_/http://static.addtoany.com/buttons/favicon.png" width="16" height="16" border="0" alt="Share/Bookmark"/> Share</a><script type="text/javascript">a2a_linkname=document.title;a2a_linkurl=location.href;</script><script type="text/javascript" src="https://web.archive.org/web/20120108152346js_/http://static.addtoany.com/menu/page.js"></script> </div> <a href="/web/20120108152346/http://cgdev.org/"> Home</a> <img src="/web/20120108152346im_/http://cgdev.org/layout/breadcrumb-arrow.png" alt=""/> <a href="/web/20120108152346/http://cgdev.org/content/publications/"> Publications</a> <img src="/web/20120108152346im_/http://cgdev.org/layout/breadcrumb-arrow.png" alt=""/> <em>Quid Pro Quo</em>: Builders, Politicians, and Election Finance in India - Working Paper 276 <div class="clear"></div> </div> <h1 class="title"> <em>Quid Pro Quo</em>: Builders, Politicians, and Election Finance in India - Working Paper 276 </h1>  <table style="width:100%" cellpadding="0" cellspacing="0"> <tr> <td id="section-content" valign="top">  <div class="download-pdf"><a href="/web/20120108152346/http://cgdev.org/files/1425795_file_Kapur_Vaishnav_election_finance_India_FINAL.pdf"><img style="margin-bottom: -1px;" src="https://web.archive.org/web/20120108152346im_/http://www.cgdev.org/layout/file_icons/icon_pdf.png"> Download (PDF,621 KB)</a>      <a target="_newfb" href="https://web.archive.org/web/20120108152346/http://www.facebook.com/sharer.php?u=http://www.cgdev.org/content/publications/detail/1425795/&t=<em>Quid Pro Quo</em>: Builders, Politicians, and Election Finance in India - Working Paper 276"><img style="position: relative;top: -1px;" src="/web/20120108152346im_/http://cgdev.org/layout/facebook_share.png"></a>  <a href="https://web.archive.org/web/20120108152346/http://twitter.com/share" class="twitter-share-button" data-count="horizontal" data-via="CGDev">Tweet</a></div> <p><a href="https://web.archive.org/web/20120108152346/http://www.cgdev.org/content/expert/detail/2705">Devesh Kapur</a> and <a href="https://web.archive.org/web/20120108152346/http://www.cgdev.org/content/expert/detail/1424325">Milan Vaishnav</a></p> <p class="detailDate">12/07/2011</p> <a href="https://web.archive.org/web/20120108152346/http://www.cgdev.org/files/1425795_file_Kapur_Vaishnav_election_finance_India_FINAL.pdf"><img src="/web/20120108152346im_/http://cgdev.org/files/1425795_image_Kapur_Vaishnav_quid_pro_quo.gif" alt="Working Paper 276" title="Download PDF" class="workingpaper left"/></a> <p>In developing countries where elections are costly and accountability mechanisms weak, politicians often turn to illicit means of financing campaigns. This paper examines one such channel of illicit campaign finance: India鈥檚 real estate sector. Politicians and builders allegedly engage in a <em>quid pro quo</em>, whereby the former park their illicit assets with the latter, and the latter rely on the former for favorable dispensation. At election time, however, builders need to re-route funds to politicians as a form of indirect election finance. One observable implication is that the demand for cement, the indispensible raw material used in the sector, should contract during elections since builders need to inject funds into campaigns. Using a novel monthly-level data set, we demonstrate that cement consumption does exhibit a political business cycle consistent with our hypothesis. Additional tests provide confidence in the robustness and interpretation of our findings. <p><b>Preview</b></p> <div><object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" style="width:650px;height:421px" id="3993d6fb-92da-de78-0838-e9a067fd912b"><param name="movie" value="http://static.issuu.com/webembed/viewers/style1/v2/IssuuReader.swf?mode=mini&embedBackground=%23fffbe8&backgroundColor=%23222222&documentId=111208143836-ea2f156697d54aba816b80378b0f0a6f"/><param name="allowfullscreen" value="true"/><param name="menu" value="false"/><param name="wmode" value="transparent"/><embed src="https://web.archive.org/web/20120108152346oe_/http://static.issuu.com/webembed/viewers/style1/v2/IssuuReader.swf" type="application/x-shockwave-flash" allowfullscreen="true" menu="false" wmode="transparent" style="width:650px;height:421px" flashvars="mode=mini&embedBackground=%23fffbe8&backgroundColor=%23222222&documentId=111208143836-ea2f156697d54aba816b80378b0f0a6f"/></object><div class="download-pdf" style="float:right;visibility:hidden;" id="div_bottom_share"><a target="_newfb" href="https://web.archive.org/web/20120108152346/http://www.facebook.com/sharer.php?u=http://www.cgdev.org/content/publications/detail/1425795/&t=<em>Quid Pro Quo</em>: Builders, Politicians, and Election Finance in India - Working Paper 276"><img style="position: relative;top: -1px;" src="/web/20120108152346im_/http://cgdev.org/layout/facebook_share.png"></a>  <a href="https://web.archive.org/web/20120108152346/http://twitter.com/share" class="twitter-share-button" data-count="horizontal" data-via="CGDev">Tweet</a><script type="text/javascript" src="https://web.archive.org/web/20120108152346js_/http://platform.twitter.com/widgets.js"></script></div>  </td> <td style="width:20px"></td> <td id="section-sidebar" valign="top">  <h3>Research Topics</h3> <ul> <li><a href="/web/20120108152346/http://cgdev.org/section/topics/inequality/">Inequality</a></li> </ul> <h3>CGD Experts</h3> <ul> <li><a href="/web/20120108152346/http://cgdev.org/content/expert/detail/1424325/">Milan Vaishnav</a></li> <li><a href="/web/20120108152346/http://cgdev.org/content/expert/detail/2705/">Devesh Kapur</a></li> </ul> <br/>  </td> </tr> </table> <script type="text/javascript"> var share_div = $("#div_bottom_share"); var offset = share_div.offset(); if(offset.top > 999 || 1){ document.getElementById('div_bottom_share').style.visibility = 'visible'; } </script>  <div class="clear"></div> </div> <div id="footer"> <div id="footer-top"> <table cellpadding="0" cellspacing="0" style="width:100%"> <tr> <td align="left"> <a href="/web/20120108152346/http://cgdev.org/section/contactus/">Contact Us</a> | <a href="/web/20120108152346/http://cgdev.org/section/about/presscenter/">Press Center</a> | <a href="/web/20120108152346/http://cgdev.org/section/about/employment/">Jobs</a> | <a href="/web/20120108152346/http://cgdev.org/section/about_enews/sitefeeds/">RSS</a> | <a href="/web/20120108152346/http://cgdev.org/section/about/donate/">Invest</a> </td> <td align="right"> © 2012, CGD. All rights reserved.   |   <a href="/web/20120108152346/http://cgdev.org/content/article/detail/1423897/">Credits</a> </td> </tr> </table> </div> <div id="footer-bottom"> <table cellpadding="0" cellspacing="0" style="width:100%"> <tr> <td valign="top" style="width:260px"> <div style="font-weight:bold">CENTER FOR GLOBAL DEVELOPMENT</div> <div style="padding-top:10px">1800 Massachusetts Avenue NW, Third Floor</div> <div style="padding-bottom:10px">Washington DC 20036</div> <div>Tel 202.416.4000   |   Fax 202.416.4050</div> </td> <td valign="top" style="width:140px; border-left:2px solid #d9e9eb; border-right:2px solid #d9e9eb"> <table cellpadding="4" cellspacing="0" style="width:100%"> <tr> <td valign="top" style="padding:0 0 20px 11px; width:33%"><a href="https://web.archive.org/web/20120108152346/http://twitter.com/cgdev" target="_blank"><img src="/web/20120108152346im_/http://cgdev.org/layout/icon-twitter.png" alt="Twitter"/></a></td> <td valign="top" style="padding: 2px 0 0 9px; width:33%"><a href="https://web.archive.org/web/20120108152346/http://www.facebook.com/cgdev" target="_blank"><img src="/web/20120108152346im_/http://cgdev.org/layout/icon-facebook.png" alt="Facebook"/></a></td> <td valign="top" style="padding-left:9px; width:33%"><a href="https://web.archive.org/web/20120108152346/http://www.youtube.com/globaldevelopment" target="_blank"><img src="/web/20120108152346im_/http://cgdev.org/layout/icon-youtube.png" alt="YouTube"/></a></td> </tr> <tr> <td valign="top" style="padding:0 0 20px 12px; width:33%"><a href="/web/20120108152346/http://cgdev.org/section/about_enews/sitefeeds/" target="_blank"><img src="/web/20120108152346im_/http://cgdev.org/layout/icon-rss-big.png" alt="RSS"/></a></td> <td valign="top" style="padding: 0 0 0 3px; width:33%"><a href="https://web.archive.org/web/20120108152346/http://intlrel.meetup.com/68/" target="_blank"><img src="/web/20120108152346im_/http://cgdev.org/layout/icon-meetup.png" alt="Meetup"/></a></td> <td valign="top" style="padding-left:9px; width:33%"><a href="https://web.archive.org/web/20120108152346/http://blogs.cgdev.org/global_prosperity_wonkcast/" target="_blank"><img src="/web/20120108152346im_/http://cgdev.org/layout/icon-podcast.png" alt="Podcast"/></a></td> </tr> </table> </td> <td valign="top" align="right"> <a href="https://web.archive.org/web/20120108152346/http://blogs.cgdev.org/global_prosperity_wonkcast/"><img src="/web/20120108152346im_/http://cgdev.org/layout/badges/wonkcast_logo_167.png" alt="Global Prosperity Wonkcast"/></a>   <a href="/web/20120108152346/http://cgdev.org/section/opinions/reading/"><img src="/web/20120108152346im_/http://cgdev.org/layout/badges/wwrbadge.png" alt="What We're Reading"/></a>   <a href="/web/20120108152346/http://cgdev.org/section/about/donate/cgd_society"><img src="/web/20120108152346im_/http://cgdev.org/layout/badges/cgd-society.jpg" alt="CGD Society"/></a> </td> </tr> </table> </div> </div> <script type="text/javascript"> var gaJsHost = (("https:" == document.location.protocol) ? "https://web.archive.org/web/20120108152346/https://ssl." : "https://web.archive.org/web/20120108152346/http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E")); </script> <script type="text/javascript"> var pageTracker = _gat._getTracker("UA-1044429-1"); pageTracker._setDomainName("cgdev.org"); pageTracker._setLocalRemoteServerMode(); pageTracker._initData(); pageTracker._trackPageview(); </script> </body> </html>

CINXE.COM

Quid Pro Quo: Builders, Politicians, and Election Finance in India - Working Paper 276 : Center for Global Development : Publications