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Local inequality and project choice : theory and evidence from Ecuador

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Author Info
Araujo, M. Caridad
Ferreira, Francisco H.G.
Lanjouw, Peter
Ozler, Berk

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Abstract

This paper provides evidence consistent with elite capture of Social Fund investment projects in Ecuador. Exploiting a unique combination of data-sets on village-level income distributions, Social Fund project administration, and province level electoral results, the authors test a simple model of project choice when local political power is unequally distributed. In accordance with the predictions of the model, poorer villages are more likely to receive projects that provide excludable (private) goods to the poor, such as latrines. Controlling for poverty, more unequal communities are less likely to receive such projects. Consistent with the hypothesis of elite capture, these results are sensitive to the specific measure of inequality used in the empirical analysis, and are strongest for expenditure shares at the top of the distribution.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3997.

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Date of creation: 01 Aug 2006
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Handle: RePEc:wbk:wbrwps:3997

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Related research
Keywords: Rural Poverty Reduction; Economic Theory&Research; Population Policies; Services&Transfers to Poor; Poverty Monitoring&Analysis;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Elbers, Chris & Lanjouw, Jean O. & Lanjouw, Peter, 2002. "Micro-level estimation of welfare," Policy Research Working Paper Series 2911, The World Bank. [Downloadable!]
  2. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March. [Downloadable!] (restricted)
  3. Chris Elbers & Jean O. Lanjouw & Peter Lanjouw, 2005. "Imputed welfare estimates in regression analysis," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 101-118, January. [Downloadable!] (restricted)
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  4. Elbers, Chris & Lanjouw, Peter F. & Mistiaen, Johan & Ozler, Berk & Simler, Ken, 2004. "On the unequal inequality of poor communities," Policy Research Working Paper Series 3313, The World Bank. [Downloadable!]
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  5. Mansuri, Ghazala & Rao, Vijayendra, 2004. "Community-based (and driven) development : A critical review," Policy Research Working Paper Series 3209, The World Bank. [Downloadable!]
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  6. John Newman & Menno Pradhan & Laura B. Rawlings & Geert Ridder & Ramiro Coa & Jose Luis Evia, 2002. "An Impact Evaluation of Education, Health, and Water Supply Investments by the Bolivian Social Investment Fund," World Bank Economic Review, Oxford University Press, vol. 16(2), pages 241-274, August.
  7. Howard White, 2002. "Social funds: a review of the issues," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(5), pages 605-610. [Downloadable!]
  8. Jeff Dayton-Johnson & Pranab Bardhan, 2002. "Inequality And Conservation On The Local Commons: A Theoretical Exercise," Economic Journal, Royal Economic Society, vol. 112(481), pages 577-602, July. [Downloadable!] (restricted)
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  9. Arjan de Haan & Jeremy Holland & Nazneen Kanji, 2002. "Social funds: an effective instrument to support local action for poverty reduction?," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(5), pages 643-652. [Downloadable!]
  10. Robert S. Chase, 2002. "Supporting Communities in Transition: The Impact of the Armenian Social Investment Fund," World Bank Economic Review, Oxford University Press, vol. 16(2), pages 219-240, August.
  11. Demombynes, Gabriel & Elbers, Chris & Lanjouw, Jenny & Lanjouw, Peter & Mistiaen, Johan & Ozler, Berk, 2002. "Producing an Improved Geographic Profile of Poverty: Methodology and Evidence from Three Developing Countries," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  12. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February. [Downloadable!] (restricted)
  13. Menno Pradhan & Laura B. Rawlings, 2002. "The Impact and Targeting of Social Infrastructure Investments: Lessons from the Nicaraguan Social Fund," World Bank Economic Review, Oxford University Press, vol. 16(2), pages 275-295, August.
  14. Chris Elbers & Jean O. Lanjouw & Peter Lanjouw, 2003. "Micro--Level Estimation of Poverty and Inequality," Econometrica, Econometric Society, vol. 71(1), pages 355-364, January. [Downloadable!] (restricted)
  15. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April. [Downloadable!] (restricted)
  16. Francisco H.G. Ferreira, 2001. "Education for the masses? The interaction between wealth, educational and political inequalities," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(2), pages 533-552, July. [Downloadable!] (restricted)
  17. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April. [Downloadable!] (restricted)
  18. Dixit, Avinash K & Londregan, John, 1994. "The Determinants of Success of Special Interests in Redistributive Politics," CEPR Discussion Papers 1054, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  19. Pranab K. Bardhan & Dilip Mookherjee, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chikako Yamauchi, 2008. "Community-based Targeting and Initial Local Conditions: Evidence from Indonesia’s IDT Program," CEPR Discussion Papers 584, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  2. François Bourguignon & Francisco Ferreira & Michael Walton, 2007. "Equity, efficiency and inequality traps: A research agenda," Journal of Economic Inequality, Springer, vol. 5(2), pages 235-256, August. [Downloadable!] (restricted)
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