Vadlamannati, Krishna Chaitanya (2008): DO ELECTIONS SLOW DOWN ECONOMIC GLOBALIZATION PROCESS IN INDIA? IT’S POLITICS STUPID !
Download (519kB) | Preview
I investigate whether timing of the elections impact economic globalization process or not in India. In other words, do elections slowdown economic globalization process? The theoretical underpinning is that, policies of economic globalization lead to economic and social hardships in short run but benefit the economy in the long run. The motto behind slowing down the economic globalization process before elections is that it leads to polarization of voters and thus negatively affects the incumbent government. I make use of Axel Dreher’s economic globalization index and construct ‘instrumental electoral cycle’ to capture the scheduled and midterm election cycle.
Using time series data for India for the period 1970 – 2006, I find that scheduled elections are associated with slow down in economic globalization, whereas midterm elections are not. Replacing Dreher’s economic globalization index with our modified globalization index does not alter the results. I also find that slow down in economic globalization process is responsive to the propinquity to a schedule election year. Meaning, as incumbent government nears the schedule elections, economic globalization process keeps slowing down, while this is exactly opposite during the early years of incumbent government in office. These results suggest that elections generate “electoral globalization cycle” in developing democratic country like India.
|Item Type:||MPRA Paper|
|Original Title:||DO ELECTIONS SLOW DOWN ECONOMIC GLOBALIZATION PROCESS IN INDIA? IT’S POLITICS STUPID !|
|Keywords:||Economic globalization; Election cycles; India|
|Subjects:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior|
|Depositing User:||Krishna Chaitanya Vadlamannati|
|Date Deposited:||25 Aug 2008 01:08|
|Last Modified:||17 Jun 2016 04:40|
Alesina, Alberto; Vittorio Grilli & Gian M. Milesi-Ferretti (1994): Political Economy of Capital Controls, in: Leonardo Leiderman and Assaf Razin (eds.), Capital Mobility: Impact on Consumption, Investment & Growth, Cambridge University Press, Cambridge: pp. 289-321.
Andersen, T. M. and Herbertsson, T. T. (2005): Quantifying globalization, Applied Economics, 37(10), pp. 1089 — 1098.
Alesina A, Roubini N. (1992): Political cycles in OECD economies, The Review of Economic Studies, 59, 663-688.
Boswell, Terry & William J. Dixon (1990): Dependency and Rebellion: a Cross national Analysis, American Sociological Review 55(4): 540–559.
Barbieri, Katherine (1996): Economic Interdependence: A Path to Peace or a Source of Interstate Conflict? Journal of Peace Research 33(1): 29–49.
Besley T, Case A. (1995): Does electoral accountability affect economic policy choices? Evidence from gubernatorial term limits, Quarterly Journal of Economics, 110, pp. 769-798.
Block S. (2002): Political business cycles, democratization, and economic reform: the case of Africa, Journal of Development Economics, 67, pp. 205-228.
Blinder, A. (2006): Off shoring: The Next Industrial Revolution? Foreign Affairs.
Beck, Nathaniel & Jonathan N. Katz (1995): What to Do (and Not to Do) with Time-Series Cross-Section Data, American Political Science Review, 89(3), 634-647
Crafts, Nicholas (2000): Globalization & Growth in Twentieth Century, IMF Working Paper, WP/00/44. Washington, D.C.: International Monetary Fund.
Chanda, Areendam (2001): Influence of Capital Controls on Long Run Growth: Where and How Much? North Carolina State University, mimeo.
Campos, Nauro F & Kinoshita, Yuko (2002): FDI as Technology Transferred: Some Panel Evidence from Transition Economies, University of Manchester, vol. 70(3), pages 398-419.
Chaudhuri K, Dasgupta S. (2005): Political determinants of central governments’ economic policies in India: Empirical investigation, Journal of International Development, 17, pp. 957-978.
Dreher, Axel, (2006): Does Globalization Affect Growth? Evidence from a new Index of Globalization, Applied Economics 38(10), pp. 1091-1110.
David Dollar, Aart Kraay (2004): Trade, Growth & Poverty, Economic Journal, 114(493), pp. 22–49.
Datta, Gaurav (1991): Has Poverty Declined Since Economic Reforms?, Economic and Political Weekly, December Issue, pp. 11-17.
De Melo, Martha, Cevdet Denizer, and Alan Gelb (1996): From Plan to Market: Patterns of Transition, Public Policy Research Paper No.1564, World Bank, Washington, DC.
Edwards, Sebastian, (1998): Openness, Productivity and Growth: What Do We Really Know?, Economic Journal, Royal Economic Society, vol. 108(447), pp. 383-98.
Fields, A. Belden (2003): Rethinking Human Rights for the New Millennium. New York: Palgrave Macmillan.
Flanagan, W. H. & E. Fogelman (1971): Patterns of Political Science in Comparative Historical Perspective, Comparative Politics 3(1), pp. 1–20.
Golden D, Poterba J (1980): The price of popularity: the political business cycle reexamined. American Journal of Political Science, 24, pp. 696-714.
Gupta SP (1999): Trickledown Theory Revisited: The Role of Employment and Poverty, VV Singh Memorial Lecture at 41st, Annual Conference of Indian Society of Labor Economics, November 18-20.
Hansen, Henrik & John Rand, (2006): On Causal Links between FDI and Growth in Developing Countries, The World Economy, Blackwell Publishing, vol. 29(1), pages 21-41.
Jacobsen, Monika S. (1996): Peace and Prosperity, or Democratic Chaos? Internasjonal Politikk 54(2): 237–254.
Khemani, S. (2004): Political cycles in a developing economy: effect of elections in the Indian states, Journal of Development Economics, 73, pp. 125-154
Karnik A. (1990): Elections and government expenditures: the Indian evidence, Journal of Quantitative Economics, 6, pp. 203-212.
Kolodko, Grzegorz W (1999): Ten Years of Postsocialist Transition: The Lessons for Policy Reforms, Macroeconomics and Growth Development Working Paper No. 2095, World Bank, Washington, DC.
Krugman, P. (2007): Trade and Inequality, Revisited, available online at http://www.voxeu.org/index.php?q=node/261
Lockwood, Ben & Redoano, Michela (2005): The CSGR Globalization Index: An Introductory Guide, Centre for the Study of Globalization and Regionalization, Working Paper 155/04.
Lindbeck, A (1976): Stabilization policy in open economies with endogenous politicians. American Economic Review, 66, pp. 1-19.
Michael D. Bordo & Christopher M. Meissner (2007): Foreign Capital and Economic Growth in the First Era of Globalization, NBER Working Papers 13577, National Bureau of Economic Research.
Mygind, Niels (1999): Societies in Transition. Copenhagen: Copenhagen Business School. http://www.econ.cbs.dk/institutes/cees/pub/sit/p1.html.
Marer, Paul, and Salvatore Zecchini, eds. (1991): The Transition to a Market Economy, 2 volumes. Paris: OECD.
Milanovic, Branko (1995): Poverty, Inequality, and Social Policy in Transition Economies, Policy Research Working Paper No. 1530, World Bank, Washington, DC.
Neumayer, Eric (2005): Do International Human Rights Treaties Improve Respect for Human Rights? Journal of Conflict Resolution, 49(6), pp. 925–953
Nordhaus W (1975): The political business cycle, Review of Economic Studies, 42, pp. 169-190.
Przeworski, Adam (1993): Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America. Cambridge, MA: Cambridge University Press.
Reid B. (1998): Endogenous elections, electoral budget cycles and Canadian provincial governments, Public Choice, 97, pp. 35-48.
Rogoff K, Sibert A (1988): Elections and macroeconomic policy cycles, Review of Economic Studies, 55, pp. 1-16.
Rogoff K (1990): Equilibrium political budget cycles, American Economic Review, 80, pp. 21-36.
Reuveny, Rafael & Li, Quan (2003): Economic Openness, Democracy & Income Inequality: An Empirical Analysis, Comparative Political Studies, 36(5), pp. 575 – 601.
Rincon, Hernan (2005): Financial Globalization, Economic Growth, & Macroeconomic Volatility, Borradores de Economia 430, Banco de la Republica de Colombia
Rodrick, D. (1997): Trade, Social Insurance, and the Limits to Globalization, NBER Working Paper No. w5905. Available at: http://papers.nber.org/papers/w5905.
Rodríguez, F. and Rodrik, D. (2000): Trade policy and economic growth: a skeptic guide to cross-national evidence, in Ben Bernanke & Kenneth Rogoff (eds.) NBER Macroeconomics Annual 2000, pp. 261– 324. Cambridge, Mass.: MIT Press.
Rodrik, D. (1997): Has Globalization Gone Too Far? Institute for International Economics, USA
Rodrik, D. (1998): Who Needs Capital-Account Convertibility? in “Should the IMF Pursue Capital-Account Convertibility”, Essays in International Finance, 207, Princeton University.
Rogers, William H. (1993): Regression Standard Errors in Clustered Samples, Stata Technical Bulletin, 13, pp. 19-23.
Rao, B. Bhaskara & Tamazian, Artur & Vadlamannati, Krishna Chaitanya (2008): Growth Effects of a Comprehensive Measure of Globalization with Country Specific Time Series Data, MPRA Paper 7917, University Library of Munich, Germany.
Summers, L. (2006): Financial Times, October 29.
Sachs, Jeffrey & Warner, Andrew, (1995): Economic Reforms and the Process of Global Integration, Brookings Papers on Economic Activity, pp. 1-118. Slantchev Branislav L. (2005): The Political Economy of Simultaneous Transitions: An Empirical Test of Two Models, Political Research Quarterly, 58, pp. 279 – 294
Schuknecht L (1996): Political business cycles and fiscal policies in developing countries, Kyklos 49, pp. 155-170.
Schuknecht L (2000): Fiscal policy cycles and public expenditure in developing countries. Public Choice, 102, pp. 115-130.
Sen K, Vaidya R (1996): Political budget cycles in India, Economic and Political Weekly, pp. 2023-2027.
Vadlamannati Krishna Chaitanya & de Soysa (2008): Do Economic Reforms care for Human Rights? Evidence from Transition economies, working paper 2008/03; USC, Spain.
Vadlamannati Krishna Chaitanya & Irala, Lokanandha (2008): FDI, Domestic Private Investments & Institutional Investors’ Perception – The Role of Economic Reforms in India, working paper series 2008/03; USC, Spain.
Vadlamannati Krishna Chaitanya (2008): Impact of Economic Reforms on Poverty – Indian Experience, working paper series 2008/01; USC, Spain.
Wolf, H.C. (1999): Transition Strategies: Choices and Outcomes, Princeton Studies in International Economics No. 85, International Economics Section.
Weede, E. (1995): Economic Policy and International Security: Rent-Seeking, Free Trade and Democratic Peace, European Journal of International Relations, 1, 519–537
Williams, Rick L (2000): A Note on Robust Variance Estimation for Cluster-correlated Data, Biometrics, 56, pp. 645-46.
Zhang, Wei, (2001): Rethinking Regional Disparity in China, Economic Change and Restructuring, vol. 34(1-2), pp. 113-38.
Economic Globalization Index: http://globalization.kof.ethz.ch/
World Development Indicators (2006), World Bank (online) http://ddp-ext.worldbank.org/WDI
Election Commission of India, http://www.eci.gov.in/index.htm