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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 ()

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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. 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. [Downloadable!] (restricted)
  2. Binmore, Ken & Samuelson, Larry, 1997. "Muddling Through: Noisy Equilibrium Selection," Journal of Economic Theory, Elsevier, vol. 74(2), pages 235-265, June. [Downloadable!] (restricted)
  3. 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.
  4. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory Of Fairness, Competition, And Cooperation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 817-868, August. [Downloadable!] (restricted)
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  5. Robinson, James A & Verdier, Thierry, 2002. "The Political Economy of Clientelism," CEPR Discussion Papers 3205, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February. [Downloadable!] (restricted)
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  7. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January. [Downloadable!] (restricted)
  8. Borgers, Tilman & Sarin, Rajiv, 1997. "Learning Through Reinforcement and Replicator Dynamics," Journal of Economic Theory, Elsevier, vol. 77(1), pages 1-14, November. [Downloadable!] (restricted)
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  9. Cabrales, Antonio, 2000. "Stochastic Replicator Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(2), pages 451-81, May.
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