Economic Governance: Does it Make or Break A Dominant Party Equilibrium? The Case of India

Abstract

Why do voters re-elect the same party for prolonged periods of time even when there are reasonable alternatives available? When and why do they stop doing so? Based on a quantitative analysis of elections between 1972 and 2014, we test the significance of ‘economic governance’ for the continuance and fall of one-party dominance in India. We show that under a command economy paradigm, a national incumbent party sustains its dominance by playing politics of patronage but in a marketized economy — as state governments gain considerable scope in managing their economic affairs — the state level incumbents become empowered to create a stable pattern of support in the states they rule . As state level effects cease to aggregate at the national level, the party system fragments. However, such an aggregation can re-emerge if a single party consistently delivers in the states which it governs.

Keywords: Federalism, Party System, India Elections, Economic Voting, Retrospective Voting, Sanction Voting, India

JEL Classification: D72, H77, H7