How do ethnic politics impact political conflict over economic policy? I present a formal model of political competition in ethnically divided societies to explicate the link between identity politics and politics over economic policymaking. I show that both brands of politics are symptomatic of the same strategic choice faced by politicians. My key insight is that incentives to engage in ethnic politics dampen motivations to win support using economic policy. By triggering identity in the electoral arena, politicians can boost their popularity among voters who value ethnicity. But the identity card polarizes political preferences, such that groups mobilized on identity become relatively less responsive to policy. Politicians thus fashion economic platforms toward other groups. My focus on identity mobilization generates insights that upturn many expectations about who gets what from the state in divided democracies. Contrary to conventional wisdom, I show that ethnically homogenous industries receive fewer preferential policies, because politicians are more likely to court voters in these industries based on identity appeals while courting workers in heterogenous industries using economic appeals. I test my theoretical predictions by using survey experiments and original data on industry-level trade policies and indicators of religion and caste ethnicity in India.
Nikhar Gaikwad (Columbia University) specializes in international and comparative political economy, with a focus on the politics of economic policymaking, trade and migration, business-state relations, and identity. He has a regional specialization in India, which he studies in comparative perspective with Brazil and other democracies. His articles have been published or are forthcoming in the American Journal of Political Science, British Journal of Political Science, and the Quarterly Journal of Political Science. His research has been funded by the Social Science Research Council, International Growth Center, Tobin Project, Institution for Social and Policy Studies, and Evidence in Governance and Politics, among other organizations. He received the David A. Lake Award for the Best Paper presented at the 2014 International Political Economy Society Annual Meeting. Prior to joining Columbia University, he was a Fellow at the Niehaus Center for Globalization and Governance at Princeton University.