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The Dual Policy in the Dual Economy - The Political Economy of Urban Bias in Dictatorial Regimes

One of the most common policy obstacles in the global effort against poverty is what is termed as “urban bias” where rural residents, who constitute majority of the poor in the world, face systematic bias against their economic interests by their own governments. This paper develops a simple political economy model of urban bias in dictatorial regimes. Equilibrium outcomes relating policy outcomes with economic structure, political power, and other behavioral and structural variables are analyzed. The model shows that anti-agricultural biases can emerge in primarily agrarian societies even if there is no bias in political power between urban and rural citizens. Evidence from recent World Bank country level panel data on biases against/for agriculture provides support for the model’s prediction.

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Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2011:22.

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Length: 24 pages
Date of creation: 15 May 2011
Date of revision:
Handle: RePEc:hhs:sunrpe:2011_0022
Contact details of provider: Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
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Fax: +46 8 16 14 25
Web page: http://www.ne.su.se/
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