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The Political Economy of Clientelism

  • Robinson, James A
  • Verdier, Thierry

Income redistribution often takes highly inefficient forms, such as employment in the bureaucracy. We argue that this arises as an optimal political strategy in situations where politicians cannot commit to policies. Political exchanges between politicians and voters must be self-enforcing and some types of policies, particularly those generating non-excludable or irreversible benefits (such as public goods and public investment) do not generate incentives. A job is a credible, excludable and reversible method of redistribution that ties the continuation utility of a voter to the political success of a particular politician. It is thus very attractive politically even if it is socially highly inefficient. Our model provides a formalization of a style of redistributive politics known as ‘clientelism’. We show that inefficient redistribution and clientelism becomes a relatively attractive political strategy in situations with high inequality and low productivity. Inefficiency is increased when (1) the ‘stakes’ from politics are high, (2) inequality is high, and (3) when money matters less than ideology in politics.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3205.

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Date of creation: Feb 2002
Date of revision:
Handle: RePEc:cpr:ceprdp:3205
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  1. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-56, March.
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  7. Acemoglu, Daron & Robinson, James A, 1999. "Inefficient Redistribution," CEPR Discussion Papers 2122, C.E.P.R. Discussion Papers.
  8. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
  9. Alesina, Alberto & Tabellini, Guido, 1988. "Credibility and politics," European Economic Review, Elsevier, vol. 32(2-3), pages 542-550, March.
  10. 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.
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  12. Alberto Alesina & Stephan Danninger & Massimo Rostagno, 1999. "Redistribution Through Public Employment: The Case of Italy," NBER Working Papers 7387, National Bureau of Economic Research, Inc.
  13. Alesina, Alberto & Baqir, Reza & Easterly, William, 2000. "Redistributive Public Employment," Journal of Urban Economics, Elsevier, vol. 48(2), pages 219-241, September.
  14. repec:oup:qjecon:v:113:y:1998:i:2:p:497-529 is not listed on IDEAS
  15. repec:oup:qjecon:v:109:y:1994:i:2:p:465-90 is not listed on IDEAS
  16. repec:oup:restud:v:57:y:1990:i:3:p:403-14 is not listed on IDEAS
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