THE DETERMINANTS OF PUBLIC GOODS PROVISION: AN EMPIRICAL EVIDENCE FROM THE MAJOR STATES OF INDIA

Abstract

The objective of the paper is to identify the factors that affect the physical provision of public goods by the state governments and measure their impact. The empirical analysis is based on political and socio-economic panel data from the 14 major states of India during 1967-68 to 2000-01. The analysis indicates that variation in the provision of public goods can be explained by the proximity of a scheduled state legislative assembly election, the effective number of parties, and the caste heterogeneity of the population. It is observed that the proximity of a scheduled election lowers the provision of public goods that require large investments and more time to deliver physically and vice-versa. Effective numbers of parties raise zilla parishad road length and lower urban road length, wells, etc. Moreover, caste heterogeneity raises per capita net electricity generated but lowers net area irrigated. Keywords: Public goods, Infrastructures, Government investment analysis, Government policy, and Irrigation.