The Impact of Market Exposure on Public Goods Provision
AbstractLow levels of public goods provision in many developing countries’ rural communities often force the poor to approach someone with considerable command over both financial and social resources to act as their patron. However engaging with the patron – typically a landlord – does not guarantee public provision, as inequality and lack of alternative options considerably weakens peasants’ bargaining power, thus enabling the landlord to use peasant’ votes to secure public resources for his own benefit. This paper proposes to increase peasants’ bargaining power, and thus their ability to pressurize their patron to broker public goods for them, by increasing their alternative options through connectivity. In order to empirically test the viability of this solution the paper makes use of a natural experiment found in the construction of a motorway in Pakistan. Using household-level data, the study shows that households situated close to the road enjoy a significantly higher level of public investment when compared to similar peasants living in isolated villages. Moreover, the data finds the beneficial impact of connectivity is felt most strongly by the socially lower classes within rural society.
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Bibliographic InfoPaper provided by University of Copenhagen, Department of Food and Resource Economics in its series IFRO Working Paper with number 2010/13.
Length: 36 pages
Date of creation: Oct 2010
Date of revision:
Public Goods Provision; Patron-Client Networks; Patronage Politics; Bargaining power; Pakistan;
Find related papers by JEL classification:
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-23 (All new papers)
- NEP-PBE-2010-10-23 (Public Economics)
- NEP-PUB-2010-10-23 (Public Finance)
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