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Democracy, Credibility, and Clientelism

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  • Razvan Vlaicu

Abstract

Despite having adopted the political institutions of established democracies, democratizing countries display a systematically different pattern of fiscal outcomes. This article attributes these differences to the low credibility of electoral promises in new democracies. We study a model of electoral competition where candidates have two costly means to make themselves credible: spending resources to communicate directly with voters and exploiting preexisting patron-client networks. The costs of building credibility are endogenous and lead to higher targeted transfers and corruption and lower public good provision. The analysis demonstrates that in low-credibility states, political appeals to patron-client networks may be welfare enhancing, but in the long run, they delay political development by discouraging direct appeals to voters that are essential for credible mass-based political parties. The model explains why public investment and corruption are higher in younger democracies and why democratizing reforms had greater success in Victorian England than in the Dominican Republic. ( JEL D720, H110, H300, H400, H500, O100) The Author 2007. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org, Oxford University Press.

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  • Razvan Vlaicu, 2008. "Democracy, Credibility, and Clientelism," Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(2), pages 371-406, October.
  • Handle: RePEc:oup:jleorg:v:24:y:2008:i:2:p:371-406
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    File URL: http://hdl.handle.net/10.1093/jleo/ewm054
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    Cited by:

    1. Khemani, Stuti, 2015. "Buying votes versus supplying public services: Political incentives to under-invest in pro-poor policies," Journal of Development Economics, Elsevier, vol. 117(C), pages 84-93.
    2. Isaksson, Ann-Sofie & Bigsten, Arne, 2014. "Clientelism and ethnic divisions," Working Papers in Economics 598, University of Gothenburg, Department of Economics.
    3. Cendales, Andrés & Mora, Jhon & Arroyo, Santiago, 2015. "Sobre las democracias locales en el Pacífico colombiano y su incidencia en la política pública de agua potable en el periodo 2008-2011," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE, issue 83, pages 161-192, February.
    4. Ernesto Calvo & Gergely Ujhelyi, 2012. "Political Screening: Theory and Evidence from the Argentine Public Sector," Working Papers 201303201, Department of Economics, University of Houston.
    5. Thaize Challier, M.-Christine, 2010. "Socio-political conflict, social distance, and rent extraction in historical perspective," European Journal of Political Economy, Elsevier, vol. 26(1), pages 51-67, March.
    6. Hanusch, Marek & Keefer, Philip, 2014. "Younger parties, bigger spenders? Party age and political budget cycles," European Economic Review, Elsevier, vol. 72(C), pages 1-18.
    7. Keefer, Philip & Neumayer, Eric & Plümper, Thomas, 2011. "Earthquake Propensity and the Politics of Mortality Prevention," World Development, Elsevier, vol. 39(9), pages 1530-1541, September.
    8. Libman, Alexander, 2013. "Natural resources and sub-national economic performance: Does sub-national democracy matter?," Energy Economics, Elsevier, vol. 37(C), pages 82-99.
    9. Devarajan, Shantayanan & Khemani, Stuti & Walton, Michael, 2011. "Civil society, public action and accountability in Africa," Policy Research Working Paper Series 5733, The World Bank.
    10. Aidt, Toke & Asatryan, Zareh & Badalyan, Lusine & Heinemann, Friedrich, 2015. "Vote buying or (political) business (cycles) as usual?," ZEW Discussion Papers 15-017, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Keefer, Philip & Khemani, Stuti, 2014. "Mass media and public education: The effects of access to community radio in Benin," Journal of Development Economics, Elsevier, vol. 109(C), pages 57-72.
    12. Fox, Sean, 2014. "The Political Economy of Slums: Theory and Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 54(C), pages 191-203.
    13. repec:eee:jcecon:v:45:y:2017:i:4:p:773-792 is not listed on IDEAS
    14. Adrian Boos & Karin Holm-Müller, 2016. "The Zambian Resource Curse and its influence on Genuine Savings as an indicator for “weak” sustainable development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 18(3), pages 881-919, June.
    15. Frédéric Gaspart & Pierre Pecher, 2015. "Ethnic inclusiveness of the central state government and economic growth in sub-Saharan Africa," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2015011, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    16. Vlaicu, Razvan & Verhoeven, Marijn & Grigoli, Francesco & Mills, Zachary, 2014. "Multiyear budgets and fiscal performance: Panel data evidence," Journal of Public Economics, Elsevier, vol. 111(C), pages 79-95.
    17. Sue, Eddie D.W. & Wong, Wei-Kang, 2010. "The political economy of housing prices: Hedonic pricing with regression discontinuity," Journal of Housing Economics, Elsevier, vol. 19(2), pages 133-144, June.
    18. Oana Borcan, 2016. "The illicit beneficts of local party alignment in national elections," University of East Anglia School of Economics Working Paper Series 2016-10, School of Economics, University of East Anglia, Norwich, UK..
    19. Jeroen Klomp & Jakob Haan, 2013. "Political budget cycles and election outcomes," Public Choice, Springer, vol. 157(1), pages 245-267, October.
    20. Pedro C. Vicente, 2011. "Oil, Corruption, and Vote-buying: A Review of the Case of São Tomé and Príncipe," Chapters,in: International Handbook on the Economics of Corruption, Volume Two, chapter 12 Edward Elgar Publishing.
    21. 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.
    22. Tribín Ana María, 2015. "Paramilitaries and Electoral Support," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 21(2), pages 191-216, April.
    23. Yuriy O. Gaivoronskiy, 2015. "The Influence of Political Competition on the Efficiency of the Regional Executives in Russia," HSE Working papers WP BRP 28/PS/2015, National Research University Higher School of Economics.
    24. Grigoli, Francesco & Mills, Zachary & Verhoeven, Marijn & Vlaicu, Razvan, 2012. "MTEFs and fiscal performance: panel data evidence," Policy Research Working Paper Series 6186, The World Bank.

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