Diversity and the Power of the Elites in Democratic Societies: A model and a test

Gilat Levy and Oriana Bandiera

No 7985, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper analyzes whether political outcomes in local democracies are determined by the preferences of the median -typically poor- agents or whether they reflect the wishes of the wealthy elites. A model shows that when politicians belonging to different groups can form coalitions, the wealthy elites' influence on policy choices is endogenously higher when there is diversity in preferences among the poor. In line with the theoretical predictions, the pattern of public good provision by local governments in Indonesia reveals that when individuals have different preferences --here due to different ethnicities-- democratic policy outcomes are closer to the preferences of the elites, rather than the preferences of the poor majority.

Keywords: Democracy; Public goods (search for similar items in EconPapers)
JEL-codes: D72 H41 O12 (search for similar items in EconPapers)
Date: 2010-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://cepr.org/publications/DP7985 (application/pdf)

Related works:
Working Paper: Diversity and the Power of the Elites inDemocraticSocieties: A Model and a Test (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:7985

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP7985

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().