Political accountability for populist policies: Lessons from the world's largest democracy

• 成果类型: Article
• 署名作者: Khanna, Gaurav; Mukherjee, Priya
• 署名单位: University of California System; University of California San Diego
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2023.104819
• 发表日期: 2023
• 关键词: Elections; Voter behavior; Demonetization

摘要

We know little about the electoral effects of policies with broad appeal that are implemented by popular leaders, but which have adverse economics effects. We analyze voter behavior following one such policy implemented in the world's largest democracy - India's 2016 'Demonetization,' which unexpectedly made 86% of the currency-in-circulation redundant overnight, and led to severe cash shortages and economic hardship in subsequent months. Yet, the policy appealed to a majority of voters, and was framed as one that would combat corruption. We leverage a discontinuity in the number of bank branches arising from a nationwide, district-level bank expansion policy. Using the fact that districts with fewer banks had greater cash shortages, we identify the impacts of demonetization's economic severity at the bankexpansion cutoff. Regression discontinuity estimates show that following demonetization, voters in places with more severe demonetization had less favorable views of the policy. Using a difference-indiscontinuity design, we find that the ruling party performed relatively worse in regions with more severe demonetization, receiving a 4.7 percentage point lower fraction of votes, and were relatively less likely to win seats in state legislatures. Areas that were historically strongly aligned with the ruling party were nearly unresponsive in voting behavior, despite having a less favorable view of the policy itself.