Working Paper: NBER ID: w26848
Authors: Leopoldo Fergusson; Carlos A. Molina; James A. Robinson
Abstract: Development outcomes come in ‘clusters’ that seem difficult to exit. Using original data from Colombia, we present evidence of the interconnection between two critical political components: state weakness and clientelism. State weakness creates the right environment for clientelism to flourish. Clientelism sets in place a structure of incentives for politicians and citizens that is detrimental to building state capacity. We show that vote buying, as a measure of clientelism, and tax evasion, as a measure of state weakness, are highly correlated at the micro level. We also report evidence that both practices are widely accepted in society, a result consistent with a deeply entrenched relationship of mutually reinforcing influences. Finally, we propose a set of mechanisms that underlie the hypothesis that a weak state and widespread clientelism are part of a political equilibrium with multiple feedback loops. Our results suggest that state weakness is a trap that is likely hard to exit.
Keywords: state weakness; clientelism; tax evasion; public goods; Colombia
JEL Codes: D72; D73; H26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| state weakness (H77) | clientelism (D73) |
| tax evasion (H26) | clientelism (D73) |
| tax evasion (H26) | state weakness (H77) |
| clientelism (D73) | state weakness (H77) |
| clientelism (D73) | public good provision (H42) |
| clientelism (D73) | belief in democracy (D72) |
| clientelism (D73) | likelihood to protest (D72) |
| clientelism (D73) | collective action (D70) |