Accelerating India's Development: A State-Led Roadmap for Effective Governance

by Karthik Muralidharan

Consider a politician with a public budget of Rs 1000 for 100 voters. They can invest in a public good that increases the total value to Rs 1500, benefiting each voter by Rs 15. Or they can redistribute Rs 750 (with 25 per cent lost to administration and corruption) to twenty-five ‘base’ voters, providing them Rs 30 each, and zero to the other seventy-five. The first option generates greater social value (Rs 1500 vs Rs 750). However, if only 20–25 per cent of registered voters are needed to win, the second strategy is politically more attractive—especially because Rs 30 is double of Rs 15, and hence, more likely to motivate base voters to turn out to vote.