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Democracy, public expenditures, and the poor

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Author Info
Keefer, Philip
Khemani, Stuti

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Abstract

Countries vary systematically with respect to the incentives of politicians to provide broad public goods, and to reduce poverty. Even in developing countries that are democracies, politicians often have incentives to divert resources to political rents, and to private transfers that benefit a few citizens at the expense of many. These distortions can be traced to imperfections in political markets, that are greater in some countries than in others. The authors review the theory, and evidence on the impact of incomplete information of voters, the lack of credibility of political promises, and social polarization on political incentives. They argue that the effects of these imperfections are large, but that their implications are insufficiently integrated into the design of policy reforms aimed at improving the provision of public goods, and reducing poverty.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3164.

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Date of creation: 30 Nov 2003
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Handle: RePEc:wbk:wbrwps:3164

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Keywords: Economic Theory&Research; Health Economics&Finance; Environmental Economics&Policies; Banks&Banking Reform; Decentralization; Environmental Economics&Policies; Economic Theory&Research; Health Economics&Finance; Banks&Banking Reform; ICT Policy and Strategies;

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  6. Edward Miguel., 2001. "Ethnic Diversity and School Funding in Kenya," Center for International and Development Economics Research (CIDER) Working Papers C01-119, University of California at Berkeley. [Downloadable!]
  7. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
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  18. Keefer, Philip & Knack, Stephen, 2002. "Boondoogles and expropriation : rent-sseking and policy distortion when property rights are insecure," Policy Research Working Paper Series 2910, The World Bank. [Downloadable!]
  19. Khemani, Stuti, 2004. "Political cycles in a developing economy: effect of elections in the Indian States," Journal of Development Economics, Elsevier, vol. 73(1), pages 125-154, February. [Downloadable!] (restricted)
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  1. Resnick, Danielle & Birner, Regina, 2006. "Does good governance contribute to pro-poor growth?: a review of the evidence from cross-country studies," DSGD discussion papers 30, International Food Policy Research Institute (IFPRI). [Downloadable!]
  2. Resnick, Danielle & Birner, Regina, 2005. "Does Good Governance Contribute to Pro-poor Growth?: A Conceptual Framework and Empirical Evidence from Cross-Country Studies," Proceedings of the German Development Economics Conference, Kiel 2005 5, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
  3. Kikeri, Sunita & Kenyon,Thomas & Palmade, Vincent, 2006. "Reforming the investment climate : lessons for practitioners," Policy Research Working Paper Series 3986, The World Bank. [Downloadable!]
  4. Akramov, Kamiljon T. & Qureshi, Sarfraz & Birner, Regina & Khan, Bilal Hasan, 2008. "Decentralization, local government elections and voter turnout in Pakistan:," IFPRI discussion papers 754, International Food Policy Research Institute (IFPRI). [Downloadable!]
  5. Singh, Nirvikar, 2007. "Fiscal Federalism and Decentralization in India," MPRA Paper 1447, University Library of Munich, Germany. [Downloadable!]
  6. Schaeffer, Michael & Yilmaz, Serdar, 2008. "Strengthening local government budgeting and accountability," Policy Research Working Paper Series 4767, The World Bank. [Downloadable!]
  7. Claudio Ferraz & Frederico Finan, 2007. "Exposing Corrupt Politicians: The Effects of Brazil’s Publicly Released Audits on Electoral Outcomes," IZA Discussion Papers 2836, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Birner, Regina & Palaniswamy, Nethra, 2006. "Financing Agricultural Development: The Political Economy of Public Spending on Agriculture in Sub-Saharan Africa," Proceedings of the German Development Economics Conference, Berlin 2006 4, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
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