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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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  1. Armin Falk & Urs Fischbacher, 2001. "A Theory of Reciprocity," CESifo Working Paper Series 457, CESifo Group Munich.
  2. Robinson, James A & Verdier, Thierry, 2002. "The Political Economy of Clientelism," CEPR Discussion Papers 3205, C.E.P.R. Discussion Papers.
  3. Antonio Cabrales, 1993. "Stochastic replicator dynamics," Economics Working Papers 54, Department of Economics and Business, Universitat Pompeu Fabra.
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  5. P. Taylor & L. Jonker, 2010. "Evolutionarily Stable Strategies and Game Dynamics," Levine's Working Paper Archive 457, David K. Levine.
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  7. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers 1812, C.E.P.R. Discussion Papers.
  8. Binmore, Ken & Samuelson, Larry, 1997. "Muddling Through: Noisy Equilibrium Selection," Journal of Economic Theory, Elsevier, vol. 74(2), pages 235-265, June.
  9. 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.
  10. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  11. 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.
  12. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
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