Building connections: Political corruption and road construction in India

Jonathan Lehne (1, 2) , Jacob N. Shapiro (3) , Oliver Vanden Eynde (1, 2)

1 PSE - Paris-Jourdan Sciences Economiques
2 PSE - Paris School of Economics
3 WWSPIL - Woodrow Wilson School of Public and International Affairs

Politically-driven corruption is a pervasive challenge for development, but evidence of its welfare effects is scarce. Using data from a major rural road construction programme in India we document political influence in a setting where politicians have no official role in contracting decisions. Exploiting close elections to identify the causal effect of coming to power, we show that the share of contractors whose name matches that of the winning politician increases by 63% (from 4% to 6.4%). Regression discontinuity estimates at the road level show that political interference raises costs, lowers quality, and increases the likelihood that roads go missing.

Mots clés: Elections; Corruption

Domaines: Economies et finances

Jonathan Lehne, Jacob N. Shapiro, Oliver Vanden Eynde. Building connections: Political corruption and road construction in India. 2016. ⟨halshs-01349350⟩