Do political elites capture crop insurance? Evidence from Indian agricultural households

It is widely accepted that political elites rent-seek by redirecting public resources from targeted welfare programs to themselves. However, little is known about whether political elites also rent-seek in crop insurance programs. Using data from a nationwide household survey, this paper examines whether politically connected agricultural households are more likely to receive insurance payouts from a government-run crop insurance program compared to nonconnected households. I find an association between political elite capture and crop insurance payouts. The results of propensity score matching provide supporting evidence. I also find that capture is more likely when government banks implement crop insurance plans instead of private banks.