Democratization, Elite Capture and Economic Development / Andrew D. Foster, Mark R. Rosenzweig.

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Foster, Andrew D

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w29797.Publication details: Cambridge, Mass. National Bureau of Economic Research 2022.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: We show using a theoretical framework that embeds a voting model in a general-equilibrium model of a rural economy with two interest groups defined by land ownership that the effects of democratization--a shift from control of public resources by the landed elite to a democratic regime with universal suffrage--on the portfolio of public goods is heterogeneous, depending the population landless. In accord with the model and empirical findings from micro data on the differing material interests of the two land classes, we find, based on 30-year panel data describing the democratization of Indian villages, that democratization in villages with a larger landless population share shifted resources away from public irrigation, secondary schools, and electrification and towards programs that increase employment. When the landed farmers have a large population share, public resources were shifted towards irrigation, secondary schools and electrification and away from employment programs.

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Previous	nber w29794 Asset Prices and Unemployment Fluctuations: A Resolution of the Unemployment Volatility Puzzle /	nber w29795 The Coming Rise in Residential Inflation /	nber w29796 Measuring Upward Mobility /	nber w29797 Democratization, Elite Capture and Economic Development /	nber w29798 Grandfathering with Anticipation /	nber w29799 Business Cycles and Healthcare Employment /	nber w2980 The Scope for Collusive Behavior Among Debtor Countries /	Next

February 2022.

We show using a theoretical framework that embeds a voting model in a general-equilibrium model of a rural economy with two interest groups defined by land ownership that the effects of democratization--a shift from control of public resources by the landed elite to a democratic regime with universal suffrage--on the portfolio of public goods is heterogeneous, depending the population landless. In accord with the model and empirical findings from micro data on the differing material interests of the two land classes, we find, based on 30-year panel data describing the democratization of Indian villages, that democratization in villages with a larger landless population share shifted resources away from public irrigation, secondary schools, and electrification and towards programs that increase employment. When the landed farmers have a large population share, public resources were shifted towards irrigation, secondary schools and electrification and away from employment programs.