Civil Unrest and Government Transfers in India

Abstract

This paper investigates empirically the role of government expenditure on social services in mitigating and preventing civil unrest (riots) in India. The empirical analysis makes use of a unique longitudinal dataset compiled across the 16 largest Indian states for the period 1960–2011. The dataset contains disaggregated information on government expenditure on a variety of social services, levels of rioting, measures of inequality and poverty, and other relevant social, economic and political variables.

India was chosen as a case study because it is a particularly good example of a society characterised by a high propensity for civil unrest, and where demand for government provision of public goods and services is high. Civil unrest is very common and persistent in India: almost 40,000 people have been killed or injured in riots in India since Independence (Wilkinson 2004). But despite being extremely violent at times, civil unrest has not resulted in full scale civil wars, as in other parts of the world. One reason may be related to how India’s democratic system responds to demands from various social groups, a hypothesis that we will attempt to test in this paper. At a practical level, the division of India across several states – each being quite large – allows us to analyse data that is collected and compiled fairly homogenously across all states. This avoids the pitfalls of cross-country analysis where comparability between datasets can be dubious at times. The use of panel data allows us, in addition, to capture the large heterogeneity of Indian states in terms of social, cultural, religious, economic and political characteristics over more than 50 years.