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Elite Capture Through Information Distortion: A Theoretical Essay

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  • Jean-Philippe Platteau

    ()

  • Vincent Somville
  • Zaki Wahhaj

    ()

Abstract

We investigate donor-beneficiary relationships in participatory development programs, where (i) communities are heterogeneous and dominated by the local elite, (ii) the elite strategically propose a project to the donor, knowing that the latter has imperfect knowledge of the needs of the target population. We analyze how changes in the donor's outside option or information about the needs of the target population affect elite capture. Our central, paradoxical result is that a more attractive outside option, or a higher quality of donor's information may end up encouraging the local elite to propose a project that better matches their own preference rather than the preference of the grassroots. Moreover, in the case where the noise in the donor's information follows a normal distribution, we find that a better outside option generally decreases elite capture but improved information about the needs of the target population is likely to increase elite capture.

Suggested Citation

  • Jean-Philippe Platteau & Vincent Somville & Zaki Wahhaj, 2013. "Elite Capture Through Information Distortion: A Theoretical Essay," Studies in Economics 1305, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:1305
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    Cited by:

    1. repec:spr:endesu:v:19:y:2017:i:4:d:10.1007_s10668-016-9799-2 is not listed on IDEAS
    2. Gani Aldashev & Cecilia Navarra, 2017. "Development NGOs: Basic Facts," Working Papers ECARES ECARES 2017-36, ULB -- Universite Libre de Bruxelles.
    3. repec:eee:ecolec:v:145:y:2018:i:c:p:18-26 is not listed on IDEAS
    4. Joaquín Morales Belpair, 2016. "Decentralized aid and democracy," Investigación & Desarrollo 0116, Universidad Privada Boliviana, revised Jun 2016.
    5. Ronelle Burger & Indraneel Dasgupta & Trudy Owens, 2015. "A Model of Nongovernmental Organization Regulation with an Application to Uganda," Economic Development and Cultural Change, University of Chicago Press, vol. 64(1), pages 71-111.
    6. repec:eee:wdevel:v:106:y:2018:i:c:p:407-421 is not listed on IDEAS

    More about this item

    Keywords

    community-driven development; aid effectiveness; elite capture; preference targeting; information distortion;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy

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