Local Politics, Political Institutions, and Public Resource Allocation

The article examines how local elites and institutions of local accountability shape the targeting of public resources in the South Indian state of Karnataka. With weak institutions of local accountability, differences in the power held by village councilors could distort the intended public resource allocation outcomes. In order to identify the effects of these power hierarchies, we use a unique policy of political representation in Karnataka that mandates representation, or reserves seats, in local governments for both historically disadvantaged groups and politically dominant groups. Villages represented by councilors belonging to disadvantaged castes receive fewer fiscal resources relative to those represented by councilors from the local elite or the OBCs. The OBC category of reservation therefore consists of two distinct groups: one group that includes all castes that lie in between the SC/ST and forward castes on the power hierarchy and another group that is made up of politically dominant castes.