A Virtuous Circle of Political Competition, Governance and Public Good Provision

• In Event: The Politics of Combatting Poverty

Abstract

This research argues that neither selectorate theory ala Bueno de Mesquita et al (2003), nor modified selectorate theory as proposed by Cao & Ward (2015) properly explain the observed variation in states’ public good provision. Ultimately states’ public good provision is explained by the interaction of political competition and the institutions of governance infrastructure. Following Becker (1958), Stigler (1972), Wittman (1989), Lizzeri & Perisco (2004), and Acemoglu et al. (2014) it hypothesized that due to greater political competition in a state a voter may get no representative in power or if they do, not get their preferred policies enacted; therefore, it is elites in power, who facing greater political competition, will be much more likely to provide a greater degree of public goods to ensure they stay in power. While this sounds like a flavor of selectorate theory it is not, as it not simply the size of the winning coalition but level of political competition that is mechanism at play. If correct, this hypothesis allows one to understand why countries with similar size winning coalitions may provide different amounts of public goods. For example, representative versus parliamentary democracies under selectorate theory may be expected to have the same provision of public goods if their winning coalition size is similar; however, this hypothesis would expect the more competitive parliamentary democracy to provide more public goods than the likely less competitive representative democracy, and the quantitative and qualitative analysis in the paper bear this out.
In addition, the longer that greater political competition has existed within a country should directly lead to better institutions of governance (rule of law, regulatory quality, control of corruption, and bureaucratic quality), because as the aforementioned literature in economics argues, political competition leads to efficiency in the political market, and these institutions are necessary for government efficiency Baird (2010). Ultimately, the interaction of a long time horizon of continued greater political competition is how to create a virtuous cycle of public good provision. This done through also the aforementioned improved governance infrastructure, which then only improves public good provision further Arora & Chong (2016). While at first seemingly similar to selectorate theory, the mechanism and resulting virtuous circle of public good provision hypothesized in this paper are ultimately far from it. By focusing on political competition as the real mechanism in public good provision, this paper returns to the ground breaking work of early political economists in showing that greater political competition leads to desirable outcomes. This political competition hypothesis is an equally elegant mechanism as the one provided by selectorate theory for the variation in the provision of public goods between countries, while being more satisfying and seemingly accurate than simply relying on the size of who you have to pay off with private goods, and if that is too big and there are not enough private goods to go around, public goods will have to do.

Author

• Ryan G. Baird, Joint Warfare Analysis Center