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Politics and the geographic allocation of public funds in a semi-democracy. The case of Ghana, 1996-2004

Author

Listed:
  • Pierre André

    () (Université de Cergy-Pontoise, THEMA)

  • Sandrine Mesplé-Somps

    () (DIAL, IRD, Paris)

Abstract

The body of literature on purely democratic countries can sometimes fail to explain the behavior of government in semi-democratic African countries. Empirical and theoretical political economic papers find that public funds target ruling party supporters and swing districts. Our results, however, suggest that the opposite was true of Ghana. We observe that pro-government districts received less public investment when the NDC was in power. We posit that this finding is partially driven by the government's will to curry favor with opposition politicians. Indeed, in addition to pursuing its electoral objectives, the government of an emerging democracy may fear political instability and keep the lid on potential unrest by bargaining with opposition leaders. Our analysis also shows that, when controlling for votes and other covariates (including wealth, urbanization and density), public goods allocation is not driven by ethnic group targeting either. _________________________________ La littérature économique portant sur la compréhension des comportements distributifs des gouvernements de pays démocratiques peut échouer à comprendre les mécanismes distributifs à l’oeuvre dans des pays semi-démocratiques africains. Les travaux théoriques et empiriques d’économie politique trouvent généralement que les partis au pouvoir ciblent les fonds publics soit vers les populations qui les soutiennent fortement, soit vers les endroits où les résultats des élections antérieures sont en ballotage séré. Cependant, nous montrons le contraire dans le cas du Ghana. Nous observons que, lorsque le parti NDC était au pouvoir, les districts les plus pro-gouvernementaux ont reçus moins de biens publics que les autres districts. De même nous ne décelons pas de ciblage vers les districts en ballotage. Nous soutenons qu’un tel phénomène est en partie du au fait que le gouvernement, pour rester en place, souhaite avoir les bonnes grâces de l’opposition. C’est ainsi que dans un pays semi-démocratique tel que le Ghana, le gouvernement tout en poursuivant des objectifs électoralistes craint l’instabilité politique et tente de maitriser toute agitation politique potentielle en négociant avec les leadeurs de l’opposition. Notre analyse montre aussi qu’en contrôlant par les votes et autres co-variables telles que le taux d’urbanisation, le niveau de richesse et la densité de population, les allocations de fonds publics ne sont pas fonction de considérations ethniques.

Suggested Citation

  • Pierre André & Sandrine Mesplé-Somps, 2011. "Politics and the geographic allocation of public funds in a semi-democracy. The case of Ghana, 1996-2004," Working Papers DT/2011/04, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201104
    as

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    References listed on IDEAS

    as
    1. World Bank, 2008. "Ghana - Public Expenditures Review : Rural Water and Sanitation Sector," World Bank Other Operational Studies 7977, The World Bank.
    2. Marcelin Joanis, 2011. "The road to power: partisan loyalty and the centralized provision of local infrastructure," Public Choice, Springer, vol. 146(1), pages 117-143, January.
    3. Hirshleifer,Jack, 2001. "The Dark Side of the Force," Cambridge Books, Cambridge University Press, number 9780521009171, October.
    4. Shawn Cole, 2009. "Fixing Market Failures or Fixing Elections? Agricultural Credit in India," American Economic Journal: Applied Economics, American Economic Association, vol. 1(1), pages 219-250, January.
    5. Schady, Norbert R., 1999. "Seeking votes - the political economy of expenditures by the Peruvian Social Fund (FONCODES), 1991-95," Policy Research Working Paper Series 2166, The World Bank.
    6. Levitt, Steven D & Snyder, James M, Jr, 1997. "The Impact of Federal Spending on House Election Outcomes," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 30-53, February.
    7. Dahlberg, Matz & Johansson, Eva, 1999. "On the Vote Purchasing Behavior of Incumbent Governments," Working Paper Series 1999:24, Uppsala University, Department of Economics.
    8. Case, Anne, 2001. "Election goals and income redistribution: Recent evidence from Albania," European Economic Review, Elsevier, vol. 45(3), pages 405-423, March.
    9. Akramov, Kamiljon T. & Asante, Felix Ankomah, 2008. "Decentralization and local public services in Ghana: Do geography and ethnic diversity matter?," GSSP working papers 16, International Food Policy Research Institute (IFPRI).
    10. Jean-Paul Azam, 2006. "The Paradox of Power Reconsidered: A Theory of Political Regimes in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(1), pages 26-58, March.
    11. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    12. Banful, Afua Branoah, 2010. "Do formula-based intergovernmental transfer mechanisms eliminate politically motivated targeting?: Evidence from Ghana," GSSP policy notes 1, International Food Policy Research Institute (IFPRI).
    13. Banerjee, Abhijit & Somanathan, Rohini, 2007. "The political economy of public goods: Some evidence from India," Journal of Development Economics, Elsevier, vol. 82(2), pages 287-314, March.
    14. Banful, Afua Branoah, 2011. "Do formula-based intergovernmental transfer mechanisms eliminate politically motivated targeting? Evidence from Ghana," Journal of Development Economics, Elsevier, vol. 96(2), pages 380-390, November.
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    Cited by:

    1. Abdul-Gafaru Abdulai & Sam Hickey, 2014. "Rethinking the politics of development in Africa? How the 'political settlement' shapes resource allocation in Ghana," Global Development Institute Working Paper Series esid-038-14, GDI, The University of Manchester.

    More about this item

    Keywords

    Public goods; Elections; Politics; Ghana.;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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