State capacity, informality and clientelism

Giuliana Pardelli and Julieta Peveri

No 2025-05, Discussion Papers from Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP)

Abstract: Understanding how to tackle clientelism is crucial for enhancing political accountability. While its negative impacts on governance are well-documented, less is known about strategies to disrupt these networks. This paper argues that stricter enforcement of labor regulations can weaken clientelistic practices. Using an instrumental variable approach based on within-municipality changes in proximity to labor offices and state-level variations in labor inspectors in Brazil, we find that enhanced enforcement significantly reduces the electoral success of clientelistic parties and curtails patronage and vote-buying. These outcomes are largely driven by a decline in informal workers, who are more likely to support clientelistic parties.

Date: 2025
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