Does good economics make for good politics in India?

By Rob 0

The choice of the controversial rabble-rouser and Hindutva mascot, Yogi Adityanath, as the chief minister of Uttar Pradesh has once again rekindled an old debate on the relative importance of economic performance and extra-economic considerations in Indian politics.

While conventional wisdom suggests that identity always triumphs economics in Indian elections, there is some evidence to suggest that economic growth may have become more important than before in recent years.

A Mint analysis of 18 major Indian states shows that governments which deliver better growth may have a greater chance of being re-elected. The analysis considers all state assembly elections held after 2001, and classifies the states intro three buckets: moderate incumbency states (such as Andhra Pradesh and Punjab) where an incumbent party (or alliance) has been voted back to power once, strong incumbency states (such as Odisha, Gujarat, and Bihar) where incumbent parties have been voted back to power more than once, and strong anti-incumbency states (such as Kerala, Uttar Pradesh, and Rajasthan) where incumbents have not lasted more than one term at a time over the past 15 years.

As the charts below show, of the five moderate incumbency states, three experienced higher economic growth during the period of incumbency than in the corresponding years before incumbency. The growth effect is markedly stronger in case of the strong incumbency states—all the six states have witnessed higher growth during the period of incumbency than before.

But what about the strong anti-incumbency states? While in a majority of such cases, in 40% of such cases, the incumbents have delivered better growth than before, and have still faced the boot.

For many decades, political scientists had lamented the fickle nature of the Indian voter, who seemed to throw out incumbents on a whim. New research suggests that this began to change since the turn of the century. A 2013 research paper by Sanjay Kumar, Shreyas Sardesai and Pranav Gupta showed that the tendency to vote out incumbents was low during the early decades of India’s independence (when most state governments were re-elected) and rose to its peak during the 1990s before declining thereafter.

The researchers attribute the change to the ability of incumbents to deliver on growth and development. A 2015 research paper by the political scientists Milan Vaishnav and Reedy Swanson arrived at similar conclusions. The paper shows that if one considered all elections between 1980 and 2012, one would not find any correlation between growth and electoral performance. But in the 2000s (and not in the previous decades), there is a positive relationship between growth and the chances of re-election.

While the evidence so far points to a modest link between growth and re-election prospects, it is difficult to conclusively establish a causal link between the two. As the economist and Mint columnist Vivek Dehejia pointed out in an earlier article, whether or not one finds a link between growth and re-election depends to some extent on the sample of states, the time-frame, and the methodology one adopts.

It will take a few more years and several more rounds of elections before we can conclusively say that growth performance wins elections in India. Nonetheless, the superior growth performance of incumbents which have been re-elected more than once seems to suggest that growth performance may be one of the key determinants, if not the only determinant, of re-election.

First Published: Tue, Mar 21 2017. 10 55 AM IST