Projects

Political Clientelism, Elite Capute: Theory and Structural Estimation

This paper extends and develops a political economy model of electoral competition where clientelism and elite capture coexist. I show that institutional frictions in a decentralised system can exacerbate inequality in equilibrium. The model uses endogenous clientelistic pressure from political party, along with voter's `own' choice of type. As a result, in equilibrium, political preference for the elite is higher than non-elite. As a consequence, the local government's wealth redistribution policy values elite more even though non-elite are in majority. I complement the model with structural estimation using local election data from West Bengal, India. I estimate the model's structural primitives, clientelistic pressure and policy preference. The estimates validates the implications from theory. The inequality that arises from such institutional frictions are inherent in decentralised democratic systems and is structurally conditioned. The framework offers a new way analyse structurally conditioned inequality, shedding light on why imperfect democratic process in unequal societies may perpetuate rather than ease inequality.