Parties and Patronage: An Analysis of Trade and Industrial Policy in India

Abstract

Charles R. Hankla Assistant Professor Department of Political Science Georgia State University PO Box 4069 Atlanta, Georgia 30302-4069 [email protected] Phone: 404-413-6172 Fax: 404-413-6156 Abstract What political factors influence the allocation of economic patronage in democracies? Answering this question is vital to improving our knowledge of how states and markets interact. In this paper, I argue that changing levels of party centralization can drive important changes in the allocation of state largess. When governing parties are centralized, national party leaders will control sources of patronage, targeting benefits to particularly influential regions and industries. By contrast, when governing parties are decentralized, influential sub-national party leaders will advocate for their constituents, allocating patronage evenly through a national logroll. I find evidence for these relationships by comparing India‟s distribution process for industrial licenses and government finance under a decentralized Congress Party (1954-61) to its distribution process under a centralized Congress Party (1969-75).