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Clientelism, income inequality, and social preferences: an evolutionary approach to poverty traps

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  • Jorge Andrés Gallego Durán

    ()

  • Rafal Raciborski

    ()

Abstract

Political clientelism is a dyadic relation in which a politician (the patron) gives material goods and services to a citizen (the client), in exchange for political support. We argue that there is a two-way relation between clientelism and income inequality and poverty. In a poor society in which income inequality is high, clientelism will be a natural outcome. Once clientelism is established, it is harder for democracy to redistribute income and it is easier for the society to be caught in a poverty trap. We develop a two-part game-theoretic model. In the first part, clientelism emerges in a poor and unequal society as a consequence of social preferences, in particular, strong reciprocity. In the second part, using evolutionary and stochastic game theory, we show that clientelism causes income inequality and poverty.

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Paper provided by UNIVERSIDAD JAVERIANA - BOGOTÁ in its series DOCUMENTOS DE ECONOMÍA with number 004717.

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Length: 22
Date of creation: 07 Feb 2008
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Handle: RePEc:col:000108:004717

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  7. A. Cabrales, 2010. "Stochastic Replicator Dynamics," Levine's Working Paper Archive 489, David K. Levine.
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  9. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-95, December.
  10. Gale, John & Binmore, Kenneth G. & Samuelson, Larry, 1995. "Learning to be imperfect: The ultimatum game," Games and Economic Behavior, Elsevier, vol. 8(1), pages 56-90.
  11. Robinson, James A & Verdier, Thierry, 2002. "The Political Economy of Clientelism," CEPR Discussion Papers 3205, C.E.P.R. Discussion Papers.
  12. Herbert Gintis & Samuel Bowles & Robert T. Boyd & Ernst Fehr (ed.), 2006. "Moral Sentiments and Material Interests: The Foundations of Cooperation in Economic Life," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262572370, December.
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