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The Impact of Market Exposure on Public Goods Provision

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  • Mahvish Shami

    ()
    (Institute of Food and Resource Economics, University of Copenhagen)

Abstract

Low 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 Info

Paper provided by University of Copenhagen, Department of Food and Resource Economics in its series IFRO Working Paper with number 2010/13.

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Length: 36 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:foi:wpaper:2010_13

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Related research

Keywords: Public Goods Provision; Patron-Client Networks; Patronage Politics; Bargaining power; Pakistan;

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  1. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-82, July.
  2. Bardhan, Pranab & Mookherjee, Dilip, 2002. "Relative Capture of Local and Central Governments: An Essay in the Political Economy of Decentralization," Center for International and Development Economics Research, Working Paper Series qt9gx7t5hd, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  3. Timothy Besley & Robin Burgess, 2000. "The political economy of government responsiveness: theory and evidence from India," LSE Research Online Documents on Economics 2308, London School of Economics and Political Science, LSE Library.
  4. Bhaduri, Amit, 1977. "On the Formation of Usurious Interest Rates in Backward Agriculture," Cambridge Journal of Economics, Oxford University Press, vol. 1(4), pages 341-52, December.
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  6. Daron Acemoglu & James A. Robinson, 2006. "De Facto Political Power and Institutional Persistence," American Economic Review, American Economic Association, vol. 96(2), pages 325-330, May.
  7. Pranab Bardhan & Dilip Mookherjee, 2003. "Pro-Poor Targeting and Accountability of Local Governments in West Bengal," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-138, Boston University - Department of Economics.
  8. Fox, Jonathan A, 1994. "The Difficult Transition from Clientelism to Citizenship: Lessons from Mexico," Center for Global, International and Regional Studies, Working Paper Series qt4n4746hk, Center for Global, International and Regional Studies, UC Santa Cruz.
  9. Bardhan, Pranab K, 1980. "Interlocking Factor Markets and Agrarian Development: A Review of Issues," Oxford Economic Papers, Oxford University Press, vol. 32(1), pages 82-98, March.
  10. Abhijit Banerjee & Rohini Somanathan, 2004. "The political economy of public goods: Some evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 04-17, Indian Statistical Institute, New Delhi, India.
  11. Basu, Kaushik, 1983. "The Emergence of Isolation and Interlinkage in Rural Markets," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 262-80, July.
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Cited by:
  1. Azam Chaudhry & Kate Vyborny, 2013. "Patronage in Rural Punjab: Evidence from a New Household Survey Dataset," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(Special E), pages 183-209, September.
  2. Mahvish Shami, 2010. "Collective Action, Clientelism and Connectivity," IFRO Working Paper 2010/14, University of Copenhagen, Department of Food and Resource Economics.

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