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Diversity and the Power of the Elites inDemocraticSocieties: A Model and a Test

Listed author(s):
  • Oriana Bandiera
  • Gilat Levy

This paper analyzes whether political outcomes in local democracies are determinedby the preferences of the median - typically poor - agents or whether they reflect thewishes of the wealthy elites. A model shows that when politicians belonging todifferent groups can form coalitions, the wealthy elites' influence on policy choices isendogenously higher when there is diversity in preferences among the poor. In linewith the theoretical predictions, the pattern of public good provision by localgovernments in Indonesia reveals that when individuals have different preferences— here due to different ethnicities — democratic policy outcomes are closer to thepreferences of the elites, rather than the preferences of the poor majority.

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File URL: http://sticerd.lse.ac.uk/dps/eopp/eopp18.pdf
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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Economic Organisation and Public Policy Discussion Papers Series with number 018.

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Date of creation: Aug 2010
Handle: RePEc:cep:stieop:018
Contact details of provider: Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

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  9. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  10. Alessro Lizzeri & Nicola Persico, "undated". "The Provision of Public Goods Under Alternative Electoral Incentives," Penn CARESS Working Papers b96440ba0bfa06ca550ac40aa, Penn Economics Department.
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  12. Masayuki Kudamatsu, 2007. "Has Democratization Reduced Infant Mortality in Sub-Saharan Africa? Evidence from Micro Data," ISER Discussion Paper 0685, Institute of Social and Economic Research, Osaka University.
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