Sweetening the Deal? Political Connections and Sugar Mills in India
研究印度糖厂发现，选举年政治关联企业通过压低甘蔗收购价来贪污资金，为竞选筹资，当选后可能补偿农民。
Political control of firms is prevalent across the world. Evidence suggests that firms profit from political connections, and politicians derive benefit from control over firms. This paper investigates an alternative mechanism through which politicians may benefit electorally from connected firms, examining sugar mills in India. I find evidence of embezzlement in politically controlled mills during election years, reflected in lower prices paid to farmers for cane. This result complements the literature on political cycles by demonstrating how campaign funds are raised rather than used. Politicians may recompense farmers upon getting elected, possibly explaining how they can get away with pilferage.