Cash for Votes: Evidence from India

This paper investigates the prevalence of vote-buying in democratic elections where stringent restrictions on corporate donations to political parties exist. We combine data from state assembly India with household-level consumer expenditure surveys (conducted by NSSO) over period 2004-11. Exploiting a difference-in-differences methodology, we estimate effects have consumption various household items: food, clothes, education-related, etc. Moreover, there is heterogeneity such adjustments across households. Our estimates suggest that legal sources funds are not sufficient for generating spikes and indicate role hidden economy politics.