INTRODUCTION

Politicians that dominate their communal groups enjoy the market power to provide their clients with cheap rewards, at least theoretically. Empirically, Chapter 6 suggests that such politicians do, indeed, exploit their market power – their constituents have spottier access to electricity and water services than do members of more competitive communities. The undersupply of desirable and productive public services is not, of course, the whole story. This chapter provides evidence that dominant leaders also aim for efficiency in how they allocate different types of payoffs to their clients – who gets club goods like electricity, and who gets privately consumable rewards like jobs.

Building off of the previous chapter, I note that patrons distribute rewards from a diversified portfolio of inducements, including club goods like public works projects and private goods like government jobs or scholarships. Politicians need to allocate these different types of rewards as efficiently as feasible. Ideally, they can distribute club goods to localities in which their clients predominate in order to leverage economies of scale, and reserve privately consumable payoffs for more diverse areas to take advantage of the precision with which they can hand out such rewards. As previously argued, dominant leaders are better positioned to pick and choose between their clients than are politicians in competitive communities. Yet as they lose their market power in a district – as it becomes more diverse – competition within (or against) other communities drives up the value of the vote among the former's constituents.

I test these claims using the Lebanese survey data because I can pair it with additional information on district and neighborhood diversity unavailable in the Yemen data. To examine the allocation of club goods at the district level, I again draw on the electricity and water consumption data analyzed in Chapter 6, but supplement these indicators with subjective assessments of infrastructure quality. Consistent with my argument, I find that dominant leaders undersupply their clients with club goods in homogeneous districts, but that their clients receive better services as districts become more diverse: competition seeps in and makes their votes more valuable. As indicators of privately consumed rewards, I examine perceived and actual distribution of government jobs.