Unstable Politics : Fiscal Space and Electoral Volatility in the Indian States

What explains variation in electoral volatility? We argue that fiscal space - availability of financial resources to enact policy initiatives and provide public programs - possessed by governments can explain the level of electoral volatility. Where governments have fiscal space, citizens reward incumbent parties with their continued support. But, when fiscal space is constrained, the incumbent government's ability to provide state resources is drastically reduced. Citizens are therefore less likely to reward the party at the polls, and are 'available' to opposition politicians and to alternative appeals. Vote-switching ensues and the incumbent government is voted out of the office. We test this argument, and others in the existing literature, on electoral returns from state assembly elections across 15 major Indian states from 1967-2004. Our results support the argument that fiscal space influences electoral volatility