{
"authors": [
"Milan Vaishnav",
"Devesh Kapur"
],
"type": "other",
"centerAffiliationAll": "dc",
"centers": [
"Carnegie Endowment for International Peace"
],
"collections": [
"Anti-Corruption"
],
"englishNewsletterAll": "ctw",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Endowment for International Peace",
"programAffiliation": "SAP",
"programs": [
"South Asia"
],
"projects": [],
"regions": [
"South Asia",
"India"
],
"topics": [
"Political Reform",
"Democracy",
"Civil Society"
]
}
Source: Getty
A new measure of construction activity reveals evidence that builders in India use their assets to help politicians circumvent election finance laws.
Source: Center for Global Development
Where elections are costly but accountability mechanisms are weak, politicians often turn to private firms for illicit election finance. Where firms are highly regulated, politicians can exchange policy discretion or regulatory forbearance for bribes and monetary transfers from firms. Due to its regulatory intensity, we focus on the role of the construction sector. Specifically, we argue that builders will experience a short-term liquidity crunch as elections approach because of their need to re-route funds to politicians as a form of indirect election finance. We use variation in the demand for cement to investigate the presence of an electoral cycle in building activity in India consistent with this logic. Using a novel monthly-level dataset, we demonstrate that cement consumption does exhibit a political business cycle consistent with our hypothesis. Additional tests provide confidence in the robustness and interpretation of our findings.
This full text of this article is available at the Center for Global Development.
Director and Senior Fellow, South Asia Program
Milan Vaishnav is a senior fellow and director of the South Asia Program and the host of the Grand Tamasha podcast at the Carnegie Endowment for International Peace. His primary research focus is the political economy of India, and he examines issues such as corruption and governance, state capacity, distributive politics, and electoral behavior. He also conducts research on the Indian diaspora.
Devesh Kapur
Starr Foundation Professor, Johns Hopkins (SAIS)
Devesh Kapur is the Starr Foundation Professor of South Asian studies at the Johns Hopkins School of Advanced International Studies (SAIS). He is the author of three books on migration, including The Other One Percent: Indians in America (with Sanjoy Chakravorty and Nirvikar Singh).
Carnegie India does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
This piece argues that the present Indian strategy, based on opportunistic diversification and utilization of limited strategic reserves, remains inadequate when confronting supply disruptions. It evaluates India’s options in the short, medium, and long terms.
Vrinda Sahai
India and the United States are close to concluding a Reciprocal Defense Procurement Agreement (RDPA) that will allow firms from the two countries to sell to each other’s defense establishments more easily. While this may not remedy the specific grievances both sides may have regarding larger bilateral issues, an RDPA could restore some momentum, following the trade deal announcement.
Konark Bhandari
On the last day of the India AI Impact Summit, India signed Pax Silica, a U.S.-led declaration seemingly focused on semiconductors. While India’s accession to the same was not entirely unforeseen, becoming a signatory nation this quickly was not on the cards either.
Konark Bhandari
On January 12, 2026, India's "workhorse," the Polar Satellite Launch Vehicle, experienced a consecutive mission failure for the first time in its history. This commentary explores the implications of this incident on India’s space sector and how India can effectively address issues stemming from the incident.
Tejas Bharadwaj
Connecting real-world AI use cases across sectors such as health, education, agriculture, and livelihoods can help policymakers, innovators, and institutions align around a shared goal. This article looks at a framework ensuring that AI works for everyone.
Shalini Kapoor, Tanvi Lall