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Diversity and the power of the elites in democratic societies: evidence from Indonesia

Bandiera, Oriana and Levy, Gilat (2011) Diversity and the power of the elites in democratic societies: evidence from Indonesia. Journal of Public Economics, 95 (11-12). pp. 1322-1330. ISSN 0047-2727

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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. Theory suggests 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. The pattern of public good provision by local governments in Indonesia is consistent with this intuition. Our analysis indeed shows 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.

Item Type: Article
Official URL: http://www.journals.elsevier.com/journal-of-public...
Additional Information: © 2011 Elsevier
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HN Social history and conditions. Social problems. Social reform
J Political Science > JA Political science (General)
Journal of Economic Literature Classification System: H - Public Economics > H1 - Structure and Scope of Government > H11 - Structure, Scope, and Performance of Government
H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods
H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H76 - State and Local Government: Infrastructures; Procurement; Public Safety; Penal Systems; Other Expenditure Categories
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 08 Dec 2011 15:20
URL: http://eprints.lse.ac.uk/40049/

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