The Price of Poverty: Inequality and the Strategic Use of Clientelism in Divided Democracies

Andrés Cendales (), Hugo Guerrero-Sierra and Jhon James Mora
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Andrés Cendales: Departamento de Economía y Administración, Facultad de Ciencias Jurídicas y Sociales, Universidad de Caldas, Manizales 170001, Colombia
Hugo Guerrero-Sierra: Facultad de Relaciones Internacionales, Estrategia y Seguridad, Universidad Militar Nueva Granada, Cajicá 250240, Colombia
Jhon James Mora: Departamento de Economía, Universidad Icesi, Cali 760031, Colombia

Economies, 2025, vol. 13, issue 7, 1-33

Abstract: This article investigates the political cost of poverty in democracies marked by deep social divisions. We develop a probabilistic voting model that incorporates clientelism as a strategic tool employed by elite political parties to secure electoral support from non-elite voters. Unlike models based on ideological proximity, our framework conceptualizes party competition as structured by the socioeconomic composition of their constituencies. We demonstrate that in contexts of high inequality and widespread poverty, elite parties face structural incentives to deploy clientelistic strategies rather than universalistic policy agendas. Our model predicts that clientelistic expenditures by elite parties increase proportionally with both inequality (GINI index) and poverty levels, rendering clientelism a rational and cost-effective mechanism of political control. Empirical evidence from a cross-national panel (2013–2019) confirms the theoretical predictions: an increase of the 1 percent in the GINI index increase a 1.3 percent in the clientelism, even after accounting for endogeneity and dynamic effects. These findings suggest that in divided democracies, poverty is not merely a condition to be alleviated, but a political resource that elites strategically exploit. Consequently, clientelism persists not as a cultural residue or institutional failure, but as a rational response to inequality-driven constraints within democratic competition.

Keywords: clientelism; inequality; poverty; democracy; game theory; GINI (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2025
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