The Dual Distributive Effects of Red Tape in Accessing Welfare

• In Event: The Politics of Social Welfare in Electoral Democracies in the Global South

Abstract

This paper investigates the distributive politics of red tape, the time-consuming bureaucratic hurdles and minutiae attached to the pursuit of government benefits and services. A simple model suggests that red tape has potentially progressive and regressive effects when it is utilized by a social welfare maximizing social planner. On the one hand, red tape can serve as a mechanism to screen out high-income individuals with high opportunity costs of time. However, red tape is also regressive, screening out poorer individuals who may be willing but unable to pay costs involved in clearing red tape. High demand for welfare among lower income individuals provides arbitrage opportunities for clientelist intermediaries who specialize in cutting red tape in exchange for the political loyalty of poor voters. Using official income surveys from Mexico as well as an original panel survey that includes data on clientelist intermediaries, we show that a clientelist market can offset regressivity, however, at a high democratic cost

Authors

• Tesalia Rizzo, University of California, Merced

• Aditya Dasgupta, University of California, Merced