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

No 7985, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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
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Citations: View citations in EconPapers (9)

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Working Paper: Diversity and the Power of the Elites inDemocraticSocieties: A Model and a Test (2010)
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