Democracy, public expenditures, and the poor

Philip Keefer and Stuti Khemani

No 3164, Policy Research Working Paper Series from The World Bank

Abstract: Countries vary systematically with respect to the incentives of politicians to provide broad public goods, and to reduce poverty. Even in developing countries that are democracies, politicians often have incentives to divert resources to political rents, and to private transfers that benefit a few citizens at the expense of many. These distortions can be traced to imperfections in political markets, that are greater in some countries than in others. The authors review the theory, and evidence on the impact of incomplete information of voters, the lack of credibility of political promises, and social polarization on political incentives. They argue that the effects of these imperfections are large, but that their implications are insufficiently integrated into the design of policy reforms aimed at improving the provision of public goods, and reducing poverty.

Keywords: Economic Theory&Research; Health Economics&Finance; Environmental Economics&Policies; Banks&Banking Reform; Decentralization; Environmental Economics&Policies; Economic Theory&Research; Health Economics&Finance; Banks&Banking Reform; ICT Policy and Strategies (search for similar items in EconPapers)
Date: 2003-11-30
New Economics Papers: this item is included in nep-dev and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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