IDEAS home Printed from https://ideas.repec.org/a/oup/econjl/v132y2022i648p2815-2834..html
   My bibliography  Save this article

Political Competition and State Capacity: Evidence from a Land Allocation Program in Mexico

Author

Listed:
  • Leopoldo Fergusson
  • Horacio Larreguy
  • Juan Felipe Riaño

Abstract

We develop a model of the politics of state capacity building undertaken by incumbent parties that have a comparative advantage in clientelism rather than in public goods provision. The model predicts that, when challenged by opponents, clientelistic incumbents have the incentive to prevent investments in state capacity. We provide empirical support for the model’s implications by studying policy decisions by the Institutional Revolutionary Party that affected local state capacity across Mexican municipalities and over time. Our difference-in-differences and instrumental variable identification strategies exploit a national shock that threatened the Mexican government’s hegemony in the early 1960s.

Suggested Citation

  • Leopoldo Fergusson & Horacio Larreguy & Juan Felipe Riaño, 2022. "Political Competition and State Capacity: Evidence from a Land Allocation Program in Mexico," The Economic Journal, Royal Economic Society, vol. 132(648), pages 2815-2834.
  • Handle: RePEc:oup:econjl:v:132:y:2022:i:648:p:2815-2834.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/ej/ueac041
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cameron G. Thies, 2005. "War, Rivalry, and State Building in Latin America," American Journal of Political Science, John Wiley & Sons, vol. 49(3), pages 451-465, July.
    2. Edward L. Glaeser & Bryce Millett Steinberg, 2017. "Transforming cities: does urbanization promote democratic change?," Regional Studies, Taylor & Francis Journals, vol. 51(1), pages 58-68, January.
    3. Fergusson, Leopoldo, 2013. "The political economy of rural property rights and the persistence of the dual economy," Journal of Development Economics, Elsevier, vol. 103(C), pages 167-181.
    4. Frederico Finan & Laura Schechter, 2012. "Vote‐Buying and Reciprocity," Econometrica, Econometric Society, vol. 80(2), pages 863-881, March.
    5. Solé-Ollé, Albert & Viladecans-Marsal, Elisabet, 2012. "Lobbying, political competition, and local land supply: Recent evidence from Spain," Journal of Public Economics, Elsevier, vol. 96(1), pages 10-19.
    6. Jean‐Marie Baland & James A. Robinson, 2012. "The Political Value of Land: Political Reform and Land Prices in Chile," American Journal of Political Science, John Wiley & Sons, vol. 56(3), pages 601-619, July.
    7. Alain de Janvry & Kyle Emerick & Marco Gonzalez-Navarro & Elisabeth Sadoulet, 2015. "Delinking Land Rights from Land Use: Certification and Migration in Mexico," American Economic Review, American Economic Association, vol. 105(10), pages 3125-3149, October.
    8. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
    9. Christopher Blattman & Horacio Larreguy & Benjamin Marx & Otis R Reid, 2019. "Eat Widely, Vote Wisely ? Lessons from a Campaign Against Vote Buying in Uganda," SciencePo Working papers Main hal-03873791, HAL.
    10. Robinson, James A. & Torvik, Ragnar & Verdier, Thierry, 2006. "Political foundations of the resource curse," Journal of Development Economics, Elsevier, vol. 79(2), pages 447-468, April.
    11. Timothy Besley & Torsten Persson, 2010. "State Capacity, Conflict, and Development," Econometrica, Econometric Society, vol. 78(1), pages 1-34, January.
    12. Daron Acemoglu & Jacob Moscona & James A. Robinson, 2016. "State Capacity and American Technology: Evidence from the 19th Century," NBER Working Papers 21932, National Bureau of Economic Research, Inc.
    13. Allen Hicken & Joel W. Simmons, 2008. "The Personal Vote and the Efficacy of Education Spending," American Journal of Political Science, John Wiley & Sons, vol. 52(1), pages 109-124, January.
    14. repec:hal:spmain:info:hdl:2441/4hgajj9cf48dladkd9pn9jcj4p is not listed on IDEAS
    15. Raúl Sánchez de la Sierra, 2020. "On the Origins of the State: Stationary Bandits and Taxation in Eastern Congo," Journal of Political Economy, University of Chicago Press, vol. 128(1), pages 32-74.
    16. Jean-Marie Baland & James A. Robinson, 2008. "Land and Power: Theory and Evidence from Chile," American Economic Review, American Economic Association, vol. 98(5), pages 1737-1765, December.
    17. Fearon, James D. & Laitin, David D., 2003. "Ethnicity, Insurgency, and Civil War," American Political Science Review, Cambridge University Press, vol. 97(1), pages 75-90, February.
    18. Filipe R. Campante & Quoc-Anh Do & Bernardo Guimaraes, 2019. "Capital Cities, Conflict, and Misgovernance," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 298-337, July.
    19. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2019. "Democracy Does Cause Growth," Journal of Political Economy, University of Chicago Press, vol. 127(1), pages 47-100.
    20. DiPasquale, Denise & Glaeser, Edward L., 1998. "The Los Angeles Riot and the Economics of Urban Unrest," Journal of Urban Economics, Elsevier, vol. 43(1), pages 52-78, January.
    21. Gustavo J. Bobonis & Paul J. Gertler & Marco Gonzalez-Navarro & Simeon Nichter, 2022. "Vulnerability and Clientelism," American Economic Review, American Economic Association, vol. 112(11), pages 3627-3659, November.
    22. Stokes, Susan C., 2005. "Perverse Accountability: A Formal Model of Machine Politics with Evidence from Argentina," American Political Science Review, Cambridge University Press, vol. 99(3), pages 315-325, August.
    23. Albertus, Michael & Diaz-Cayeros, Alberto & Magaloni, Beatriz & Weingast, Barry R., 2016. "Authoritarian Survival and Poverty Traps: Land Reform in Mexico," World Development, Elsevier, vol. 77(C), pages 154-170.
    24. Melissa Dell & Nathan Lane & Pablo Querubin, 2018. "The Historical State, Local Collective Action, and Economic Development in Vietnam," Econometrica, Econometric Society, vol. 86(6), pages 2083-2121, November.
    25. Cesi Cruz & Philip Keefer, 2015. "Political Parties, Clientelism, and Bureaucratic Reform," IDB Publications (Working Papers) 89657, Inter-American Development Bank.
    26. Edward L. Glaeser & Bryce Millett Steinberg, 2016. "Transforming Cities: Does Urbanization Promote Democratic Change?," NBER Working Papers 22860, National Bureau of Economic Research, Inc.
    27. Galasso, Vincenzo & Nannicini, Tommaso, 2011. "Competing on Good Politicians," American Political Science Review, Cambridge University Press, vol. 105(1), pages 79-99, February.
    28. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413.
    29. Elias Papaioannou, 2014. "National Institutions and Subnational Development in Africa," The Quarterly Journal of Economics, Oxford University Press, vol. 129(1), pages 151-213.
    30. Leopoldo Fergusson & Carlos A. Molina & James A. Robinson, 2022. "The Weak State Trap," Economica, London School of Economics and Political Science, vol. 89(354), pages 293-331, April.
    31. Stelios Michalopoulos & Elias Papaioannou, 2013. "Pre‐Colonial Ethnic Institutions and Contemporary African Development," Econometrica, Econometric Society, vol. 81(1), pages 113-152, January.
    32. James A. Robinson & Thierry Verdier, 2013. "The Political Economy of Clientelism," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(2), pages 260-291, April.
    33. Acemoglu, Daron, 2005. "Politics and economics in weak and strong states," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1199-1226, October.
    34. Timothy Besley & Torsten Persson & Daniel M. Sturm, 2010. "Political Competition, Policy and Growth: Theory and Evidence from the United States," CEP Discussion Papers dp1009, Centre for Economic Performance, LSE.
    35. Larreguy, Horacio & Marshall, John & Querubã N, Pablo, 2016. "Parties, Brokers, and Voter Mobilization: How Turnout Buying Depends Upon the Party’s Capacity to Monitor Brokers," American Political Science Review, Cambridge University Press, vol. 110(1), pages 160-179, February.
    36. Leopoldo Fergusson & James A. Robinson & Ragnar Torvik & Juan F. Vargas, 2016. "The Need for Enemies," Economic Journal, Royal Economic Society, vol. 126(593), pages 1018-1054, June.
    37. Razvan Vlaicu, 2008. "Democracy, Credibility, and Clientelism," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(2), pages 371-406, October.
    38. repec:hal:wpspec:info:hdl:2441/7j1t12vvla8c887v4q18ihljej is not listed on IDEAS
    39. Cruz, Cesi & Keefer, Philip, 2015. "Political Parties, Clientelism, and Bureaucratic Reform," IDB Publications (Working Papers) 6968, Inter-American Development Bank.
    40. repec:hal:spmain:info:hdl:2441/11auergscg875893gvc2mtel3q is not listed on IDEAS
    41. Philip Keefer, 2007. "Clientelism, Credibility, and the Policy Choices of Young Democracies," American Journal of Political Science, John Wiley & Sons, vol. 51(4), pages 804-821, October.
    42. Costa, Dora L. & Lamoreaux, Naomi R. (ed.), 2011. "Understanding Long-Run Economic Growth," National Bureau of Economic Research Books, University of Chicago Press, number 9780226116341, December.
    43. Wallace, Jeremy, 2014. "Cities and Stability: Urbanization, Redistribution, and Regime Survival in China," OUP Catalogue, Oxford University Press, number 9780199378999.
    44. Mark Dincecco & Gabriel Katz, 2016. "State Capacity and Long‐run Economic Performance," Economic Journal, Royal Economic Society, vol. 126(590), pages 189-218, February.
    45. Daron Acemoglu & Jacob Moscona & James A. Robinson, 2016. "State Capacity and American Technology: Evidence from the Nineteenth Century," American Economic Review, American Economic Association, vol. 106(5), pages 61-67, May.
    46. Jeremy Bowles & Horacio Larreguy & Shelley Liu, 2020. "How Weakly Institutionalized Parties Monitor Brokers in Developing Democracies: Evidence from Postconflict Liberia," American Journal of Political Science, John Wiley & Sons, vol. 64(4), pages 952-967, October.
    47. Garfias, Francisco, 2018. "Elite Competition and State Capacity Development: Theory and Evidence from Post-Revolutionary Mexico," American Political Science Review, Cambridge University Press, vol. 112(2), pages 339-357, May.
    48. Timothy Besley & Torsten Persson & Daniel M. Sturm, 2010. "Political Competition, Policy and Growth: Theory and Evidence from the US," Review of Economic Studies, Oxford University Press, vol. 77(4), pages 1329-1352.
    49. José Luis Montiel Olea & Carolin Pflueger, 2013. "A Robust Test for Weak Instruments," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(3), pages 358-369, July.
    50. Thomas Fujiwara & Leonard Wantchekon, 2013. "Can Informed Public Deliberation Overcome Clientelism? Experimental Evidence from Benin," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 241-255, October.
    51. Daron Acemoglu & James A. Robinson & Rafael J. Santos, 2013. "The Monopoly Of Violence: Evidence From Colombia," Journal of the European Economic Association, European Economic Association, vol. 11, pages 5-44, January.
    52. repec:hal:spmain:info:hdl:2441/7j1t12vvla8c887v4q18ihljej is not listed on IDEAS
    53. Dora L. Costa & Naomi R. Lamoreaux, 2011. "Understanding Long-Run Economic Growth: Geography, Institutions, and the Knowledge Economy," NBER Books, National Bureau of Economic Research, Inc, number cost10-1, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adrian Nicholas Gachet, 2022. "Help Me Help You? Populism and Distributive Politics in Ecuador," Economics Discussion Paper Series 2205, Economics, The University of Manchester.
    2. Francesco Amodio & Giorgio Chiovelli & Sebastian Hohmann, 2019. "The Employment Effects of Ethnic Politics," Cahiers de recherche 12-2019, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    3. Eslava, Francisco & Valencia Caicedo, Felipe, 2023. "Origins of Latin American inequality," LSE Research Online Documents on Economics 119763, London School of Economics and Political Science, LSE Library.
    4. Leopoldo Fergusson & Carlos A. Molina & James A. Robinson, 2022. "The Weak State Trap," Economica, London School of Economics and Political Science, vol. 89(354), pages 293-331, April.
    5. Leopoldo Fergusson, 2019. "Who wants violence? The political economy of conflict and state building in Colombia," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 38(78), pages 671-700, November.
    6. Ana L. De La O, 2021. "How clientelism undermines state capacity: Evidence from Mexican municipalities," WIDER Working Paper Series wp-2021-169, World Institute for Development Economic Research (UNU-WIDER).
    7. Amat, Francesc & Beramendi, Pablo, 2016. "Economic and Political Inequality: The Role of Political Mobilization," CAGE Online Working Paper Series 277, Competitive Advantage in the Global Economy (CAGE).
    8. Elizalde, Aldo, 2020. "On the economic effects of Indigenous institutions: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 147(C).
    9. Canen, Nathan & Ch, Rafael & Wantchekon, Leonard, 2023. "Political uncertainty and the forms of state capture," Journal of Development Economics, Elsevier, vol. 160(C).
    10. Maxime Menuet & Hugo Oriola & Patrick Villieu, 2021. "Do Conservative Central Bankers Weaken the Chances of Conservative Politicians?," Working Papers hal-03479411, HAL.
    11. Artem Kochnev, 2021. "Marching to Good Laws: The Impact of War, Politics, and International Credit on Reforms in Ukraine," wiiw Working Papers 192, The Vienna Institute for International Economic Studies, wiiw.
    12. Maxime Menuet & Patrick Villieu, 2021. "Reputation and the “need for enemies”," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1049-1089, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fergusson, Leopoldo & Larreguy, Horacio & Riaño, Juan Felipe, 2015. "Political constraints and state capacity: Evidence from a land allocation program in Mexico," Research Department working papers 764, CAF Development Bank Of Latinamerica.
    2. Leopoldo Fergusson & Carlos A. Molina & James A. Robinson, 2022. "The Weak State Trap," Economica, London School of Economics and Political Science, vol. 89(354), pages 293-331, April.
    3. Mizuno, Nobuhiro, 2016. "Political structure as a legacy of indirect colonial rule: Bargaining between national governments and rural elites in Africa," Journal of Comparative Economics, Elsevier, vol. 44(4), pages 1023-1039.
    4. Acemoglu, Daron & Robinson, James A. & Torvik, Ragnar, 2020. "The political agenda effect and state centralization," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 749-778.
    5. Beg, Sabrin, 2021. "Tenancy and clientelism," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 201-226.
    6. Gustavo J. Bobonis & Paul J. Gertler & Marco Gonzalez-Navarro & Simeon Nichter, 2022. "Vulnerability and Clientelism," American Economic Review, American Economic Association, vol. 112(11), pages 3627-3659, November.
    7. Hicken, Allen & Leider, Stephen & Ravanilla, Nico & Yang, Dean, 2018. "Temptation in vote-selling: Evidence from a field experiment in the Philippines," Journal of Development Economics, Elsevier, vol. 131(C), pages 1-14.
    8. Keefer, Philip & Vlaicu, Razvan, 2017. "Vote buying and campaign promises," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 773-792.
    9. Leight, Jessica & Foarta, Dana & Pande, Rohini & Ralston, Laura, 2020. "Value for money? Vote-buying and politician accountability," Journal of Public Economics, Elsevier, vol. 190(C).
    10. Lu, Yi & Luan, Mengna & Sng, Tuan-Hwee, 2020. "Did the communists contribute to China’s rural growth?," Explorations in Economic History, Elsevier, vol. 75(C).
    11. Alice Guerra & Mogens K. Justesen, 2022. "Vote buying and redistribution," Public Choice, Springer, vol. 193(3), pages 315-344, December.
    12. Rodriguez Acosta, Mauricio, 2016. "Essays in political economy and resource economic : A macroeconomic approach," Other publications TiSEM 1e39ef1b-43a2-4f95-892c-6, Tilburg University, School of Economics and Management.
    13. Bardhan, Pranab, 2022. "Clientelism and governance," World Development, Elsevier, vol. 152(C).
    14. Christopher Blattman & Horacio Larreguy & Benjamin Marx & Otis Reid, 2019. "Eat Widely, Vote Wisely ? Lessons from a Campaign Against Vote Buying in Uganda," SciencePo Working papers Main hal-03608420, HAL.
    15. Stanley L. Winer & J. Stephen Ferris & Bharatee Bhusana Dash & Pinaki Chakraborty, 2021. "Political competitiveness and the private–public structure of public expenditure: a model and empirics for the Indian States," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(6), pages 1430-1471, December.
    16. Vladimir Shchukin & Cemal Eren Arbatli, 2022. "Clientelism and development: Vote-buying meets patronage," Journal of Theoretical Politics, , vol. 34(1), pages 3-34, January.
    17. Daron Acemoglu & Camilo García-Jimeno & James A. Robinson, 2015. "State Capacity and Economic Development: A Network Approach," American Economic Review, American Economic Association, vol. 105(8), pages 2364-2409, August.
    18. Bobonis, Gustavo & Gertler, Paul & Gonzalez-Navarro, Marco & Nichter, Simeon, 2023. "Does Combating Corruption Reduce Clientelism?," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt13k514pd, Department of Agricultural & Resource Economics, UC Berkeley.
    19. Amodio, Francesco & Chiovelli, Giorgio & Hohmann, Sebastian, 2019. "The Employment Effects of Ethnic Politics," IZA Discussion Papers 12818, Institute of Labor Economics (IZA).
    20. Elizalde, Aldo, 2020. "On the economic effects of Indigenous institutions: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 147(C).

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:econjl:v:132:y:2022:i:648:p:2815-2834.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.