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Clientelism, Credibility, and the Policy Choices of Young Democracies

Authors


  • The comments of George Clarke, Scott Gehlbach, and Razvan Vlaicu, and participants at seminars at the University of California–San Diego, the International Society of New Institutional Economics, and the University of Göteborg are gratefully acknowledged. This article and its conclusions are entirely those of the author and not those of the World Bank or its directors.

Philip Keefer is lead research economist, Development Research Group, The World Bank, 3728 Chesapeake St., NW, Washington, DC 20016 (pkeefer@worldbank.org).

Abstract

This article identifies for the first time systematic performance differences between younger and older democracies and argues that these are driven by the inability of political competitors to make broadly credible preelectoral promises to voters. Younger democracies are more corrupt; exhibit less rule of law, lower levels of bureaucratic quality and secondary school enrollment, and more restrictions on the media; and spend more on public investment and government workers. This pattern is exactly consistent with the predictions of Keefer and Vlaicu (n.d.). The inability of political competitors to make credible promises to citizens leads them to prefer clientelist policies: to underprovide nontargeted goods, to overprovide targeted transfers to narrow groups of voters, and to engage in excessive rent seeking. Other differences that young democracies exhibit, including different political and electoral institutions, greater exposure to political violence, and greater social fragmentation, do not explain, either theoretically or empirically, these policy choices.

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