Economics of Political Clientelism and Corruption — A Theoretical Pathway

This paper proposes a preliminary economic model of political clientelism and corruption indeveloping countries with weak rule of law. It explains why this corruption is often chronic and persistent, and furtherexamines its impact on fragility, conflict, and violence. The basic model is built in three stages: (i) politicalparty strategies vis-à-vis clientelist options using a game-theoretical approach, (ii) strategies of using staterepression and violence to complement electoral clientelism, and (iii) strategies of geographical/ethnic entities onremaining within a given republic or breaking away. The model predicts that the first clientelist party in power canmonopolize government for long periods and further consolidate power by blending in state violence. Politicalclientelism and corruption are likely to provoke geographically distinct communities and movements tochallenge the sovereignty and territorial integrity of the country concerned. The impact on fragility is predicted asgreatest during monopolistic and dictatorial clientelism. Governance structures of inegalitarian or unjust localtraditional authorities are shown to be an important independent factor provoking separatism. Separatistmovements are predicted to be left leaning or egalitarian in the beginning of their struggle. As economies grow and shiftaway from a patronage-based private sector toward a productive one, individuals are likely to be protective oftheir enterprises and incomes against the aleatory decisions of a clientelist government. Therefore, a substantiallyenhanced investment in a productive private sector may likely be a better longer term anti-corruption strategy thanexclusively focusing on governance, accountability, and accounting measures.