How Do Voters Respond to Welfare vis-a-vis Infrastructure Programs? Evidence for Clientelism in West Bengal∗

We study how voters respond to increased welfare and infrastructure program benefits delivered by local governments in West Bengal. Voters respond positively to welfare programs but not to infrastructure programs, while reporting having benefitted from both. Consistent with the voting patterns, shocks to electoral competition induced by exogenous redistricting of villages resulted in upper-tier governments manipulating allocations across local governments only for welfare programs. Through the lens of a hierarchical budgeting model, we argue these results indicate presence of political clientelism rather than programmatic politics. JEL Classification: H40, H75, H76, O10, P48. ∗An earlier version of this paper was circulated under the title ‘Resource Transfers to Local Governments: Political Manipulation and Household Responses in West Bengal’. We thank Lakshmi Iyer for help with the redistricting analysis, and participants at various seminars and conferences for useful feedback. For financial support, we thank the Economic Development and Institutions network and the International Growth Centre. †University of California, Berkeley ‡Indian Statistical Institute §Boston University ¶Federal Reserve Bank of Minneapolis