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VOTE-BUYING AND GROWTH

Published online by Cambridge University Press:  26 January 2011

Hans Gersbach  and
Felix Mühe
Hans Gersbach*
Affiliation:
Center of Economic Research at ETH Zurich and CEPR
Felix Mühe
Affiliation:
Center of Economic Research at ETH Zurich
*
Address correspondence to: Hans Gersbach, Center of Economic Research at ETH Zurich, 8092 Zurich, Switzerland; e-mail: [email protected].
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Abstract

Vote-buying is widely used by parties in developing countries to influence the outcome of elections. We examine the impact of vote-buying on growth. We consider a model with a poverty trap where redistribution can promote growth. We show that vote-buying contributes to the persistence of poverty as taxed wealthy people buy votes from poor people. We then show that there exists a democratic constitution that breaks vote-buying and promotes growth. Such a constitution involves rotating agenda setting, a taxpayer-protection rule, and repeated voting. The latter rule makes vote-buying prohibitively costly.

Keywords

Vote-BuyingPolitical EconomyPoverty TrapsEconomic DevelopmentVoting RulesRepeated Voting
Type
Articles
Information
Macroeconomic Dynamics , Volume 15 , Issue 5 , November 2011 , pp. 656 - 680
Copyright
Copyright © Cambridge University Press 2011

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