Status Politics Hollows out the State: Evidence from Colonial India

This paper argues that political elites may weaken bureaucratic capacity in anticipation of future redistribution. One such instance occurred in the Colonial Indian provinces, where incumbent elites hollowed out tax capacity in anticipation of franchise expansion. While studies of intra-elite competition have focused on economic inequality as a key factor in shaping elite motivations, this paper finds that high-caste elites in the colonial era, who sought to preserve their status dominance, weakened institutions in order to limit the ability of future elected lower castes to integrate public goods to lower castes. As elite bureaucrats as well as local tax collectors, upper castes enabled tax avoidance and exited the local bureaucratic machinery. Using a historical dataset from 1914-1925 and novel micro-level measures of land tax collection, tax avoidance, and the size of the bureaucracy, the paper demonstrates that bureaucratic capacity declined after franchise expansion in the districts with higher levels of inter-caste status inequality and where threats of political accedence of lower castes were greater.