Clientelism and development: Vote-buying meets patronage

Coautor: Cemal Eren Arbatli

Offering employment in the public sector in exchange for electoral support (patronage politics) and vote-buying are clientelistic practices frequently used by politicians. In the literature, these practices are typically studied in isolation. In this paper, we study how the interaction between these two practices (as opposed to having just one tool) affects economic development. We present a theoretical model of political competition, where, before the election, the incumbent chooses the level of state investment that can improve productivity in the private sector. This decision affects the income levels of employees in the private sector, and, thereby, the costs and effectiveness of vote-buying and patronage. We show two mechanisms explaining why the incumbent uses both vote-buying and patronage. First, when the politician can use both clientelistic instruments simultaneously, his opportunity cost for clientelism in terms of foregone future taxes declines. Second, since voters usually expect (additional) benefits after the elections, they want to sell their votes to the candidate who has a higher chance of winning the elections. When a politician uses both vote-buying and patronage, voters are more confident in his victory and are inclined to vote for him. Because of these two mechanisms the equilibrium amount of public investment is typically lower when both tools are available than otherwise.

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