The Business of Distributive Politics in Developing Democracies

• In Event: Campaign Finance in Developing Democracies

Abstract

Businesses are largely absent from scholarship on distributive politics in developing democracies. Existing research focuses on the relationship between politicians, voters, and strategies such as vote-buying and patronage by party brokers. Drawing on firm-level data and surveys of politicians and business owners, this paper demonstrates that the imperative to raise funds for political campaigns leads politicians to invest in publicly provided private goods rather than efficient income transfers or growth-enhancing public goods, benefiting large firms in concentrated sectors such as manufacturing and media, while imposing costs on a heterogeneous and fragmented retail sector. By developing a sectoral theory of campaign finance in developing democracies, the paper bridges scholarship on redistribution, clientelism, and business in poor democracies.

Author

• Gautam Nair, Harvard University