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On the political economy of a backward region

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  • Abhirup Sarkar

Abstract

Purpose - The purpose of this paper is to develop a political economy model for a less developed region where a significantly large number of people belonging to the informal sector depend on political favours for their survival due to ill‐defined property rights. The purpose is to show that in such a scenario, democracy and political competition might lead to economic stagnation. Design/methodology/approach - The arguments in the paper are represented in terms of a theoretical model. Findings - The central result is that the party with a better political organization will have the incentive to maximize the size of the informal sector, which will also maximize its probability of winning. In equilibrium this party choosing anti‐development policies will have a higher probability to be in power. Thus universal franchise may lead to inefficiencies in such economies. These inefficiencies stem from ill‐defined property rights in the informal sector. Originality/value - This paper is an original contribution to the class of political economy models of less developed countries.

Suggested Citation

  • Abhirup Sarkar, 2010. "On the political economy of a backward region," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 3(2), pages 122-137, September.
    • Handle: RePEc:eme:igdrpp:v:3:y:2010:i:2:p:122-137
    DOI: 10.1108/17538251011084455
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    1. Das, Upasak, 2015. "Does Political Activism and Affiliation Affect Allocation of Benefits in the Rural Employment Guarantee Program: Evidence from West Bengal, India," World Development, Elsevier, vol. 67(C), pages 202-217.
    2. Sarkar, Abhirup & Sinha, Abhinandan, 2022. "Clientelism and violence: The politics of informal economy," Economic Modelling, Elsevier, vol. 114(C).

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