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. With data from 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, state governments gain considerable scope in managing their economic affairs. This enables different state parties to create a stable pattern of support in states. 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.