Federal system minimised electoral reward for BJP’s welfare reforms, study finds

Political competition at different levels of government in a federal system undermines any one party’s ability to win votes by offering more generous welfare benefits, new research from Bayes Business School (formerly Cass) in London suggests.

The authors analysed the electoral impact of welfare reforms aimed at improving support for the poorest households in the Indian state of West Bengal – chosen because it was the last state to resist the surge in support for the Hindu nationalist BJP over the last 20 years.

The reforms, which were spearheaded by Narendra Modi’s national government, included stricter eligibility checks and direct payments into bank accounts. They were expected to reduce local officials’ discretion in delivering benefits – something that is often used strategically by political parties to gain electoral support (“clientelism”).

The BJP’s recent ascendancy in West Bengal has puzzled observers, with many in the international media attributing it to the party’s success at reforming the welfare system and increasing the proportion of benefits paid to the poorest households. It went from 6 per cent of the vote in 2009 to 40 per cent in 2019 – and finally took power in the state in May after securing 45 per cent of the vote.

However, while the paper concludes that the new scheme’s targeting increased the proportion of benefits reaching the poorest households from 19 per cent to 22 per cent, the reforms produced only minimal electoral gains for the BJP.

The academics drew on longitudinal surveys in West Bengal that mapped participants’ receipt of welfare payments on to the political party they supported in public opinion-style polling undertaken in 2013 and 2018. The paper was published in the respected Journal of Public Economics.

Co-author Dr Sujata Visaria, Reader in Finance at London’s Bayes Business School, said: “On the one hand, the BJP implemented reforms and assertively claimed credit for reducing corruption and promoting welfare. On the other, the party’s regional rival, the TMC, which controlled West Bengal’s state and local governments, introduced their own state-level schemes. They appear to deliver them strategically to households most likely to vote for them.”

Local and regional  power bases endure

Crucially, state and local governments retain influence over the ‘last mile’ delivery of the nationally-mandated old and new benefits. They can determine whether a household is considered eligible for a scheme, or the form in which the benefits will be delivered. As a result, households attributed part of even the federal benefits to the party in power locally (TMC) rather than the BJP.

Co-author Professor Pushkar Maitra said: “Our findings offer valuable insights into the politics of welfare reform in a federal setting. In a large developing country like India with multiple layers of government, it can be challenging to undertake a comprehensive reform of the welfare system. Partial reforms are much more likely – leaving significant power with actors at the state and local level. Our paper shows how political competition among different parties in a federal system can undermine any one party’s ability to make electoral gains through improved welfare delivery.”

The data does not provide a definitive explanation for the rising BJP vote in West Bengal through the late 2010s and the TMC’s recent eviction from office after 15 years. However, the authors find that general caste Hindu households responded much more positively than non-Hindu households to BJP-associated welfare benefits – which suggests that the BJP’s appeal is greatly boosted by its messaging along religious lines.