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South Asian Studies Speaker Series Presents: Vineeta Yadav

Tuesday, January 28, 2025
3:30 p.m.–5:00 p.m.
101 Old Botany Building
South Asian Studies Speaker Series Presents: Vineeta Yadav
“Taste for Risk: Elite Risk Preferences in Developing Country Democracies”

How do politicians make risky choices? What shapes their taste for political risk? Do their risk preferences influence their political and policy choices? These are the questions we address in this paper. While two recent studies of MPs in four rich, established democracies find their MPs are not expected utility maximizing (EUT) rational actors, there are no studies of risky decision-making by politicians in developing countries. In this paper, we provide the first such study. We hypothesize that differences in personal experience with parliament and dictatorship should lead to systematic differences in politicians’ risk preferences within countries creating distinct national risk distributions. We test these predictions by administering an experimental decision task to parliamentary candidates in India, a stable democracy, and Pakistan which last transitioned to democracy in 2008. We find that parliamentary experience makes politicians more risk loving while autocratic experience makes Pakistani politicians more risk averse; politicians deviate from both EUT and prospect theory in both countries. Strikingly while Indians are overwhelmingly risk loving, Pakistanis are highly risk averse. Finally, we present evidence that shows that individual risk preferences predict which politicians are perennial party hoppers and which ones are loyal partisans.

Headshot of Vineeta Yadav
Headshot of Vineeta Yadav
101 Old Botany Building