IS DEMOCRACY GOOD FOR THE POOR?

IS DEMOCRACY GOOD FOR THE POOR?

M. Ross

American Journal of Political Science, Vol. 50, No. 4 (Oct., 2006) pp. 860-874

A Summary 

In a Nutshell

Whilst it may be true that democracies spend more money on public goods provision, it is not clear that they have any demonstrable effects on the material wellbeing of the poor, measured by proxy of infant mortality rates. Studies that have shown causal linkages between democracy and development are too often based on unsound empirical techniques, or use too restrictive an interpretation of well-being.

Theories of Regime Type and Poverty

  1. Sen (1) – Democracies allow electorates to punish governments for poor behavior. Political leaders will therefore seek to avoid (for example) famine, as if there is competition and opposition the penalty of famines will fall on the ruling groups and political leaders as well as the starving.
  2. Sen (2) – Democracies are better at transmitting information from poor and remote areas to the central government thanks largely to press freedom.
  3. Democracies help the poor by providing more public goods (Lake and Baum) and income redistribution. This builds on the Meltzer Richard framework whereby as suffrage extends the income position of the median voter downwards in the income distribution, and when his position is lower than the average position he will favour a higher tax rate. In short, democracy brings more people with below-average income to the polls, and they collectively force the government to redistribute income downwards.

 That democracies spend more seems to be borne out by the data, but they do not improve infant and child mortality rates. This claim is based on what is supposedly a much more complete data set which unlike many studies controls for fixed effects and time fixed effects.

 Theories Revisited

  • If democracies spend more on health services then why does this have such little effect on child mortality?
  • It seems plausible that the goods such as clean water and health care that keep children alive show highly inelastic demand. In other words families will spend what they have to in order to keep their children alive. This spending is however constrained by income.
  • Now if the state starts to provide those goods they lower the price of them for families. Yet, as demand is inelastic this means that as long as households are not income constrained they would have consumed them anyway. This implies that if the subsidies are received largely by the upper and middle classes there will be no effect on child mortality as those households would have consumed the lifesaving goods regardless of the government provision. The only way such spending can have an effect is if the services are received by the poorest income constrained households.
  • The Meltzer Richards framework may well predict a downward distribution of income, but it does not follow that the median voter will penalize the rich in order to raise the incomes of everyone that exist below the average income level. If he is a member of the middle classes he may well argue for redistributive policies that augment the incomes of the middle classes rather than those in the bottom quintile. Those families that are the poorest will only benefit if redistribution resembles a flat-rate level of benefits.
  • To predict who the government will target we need to know the specific institutional design, the collective capabilities of the lowest quintile, the tendency of the poor to vote along ethnic rather than class lines etc.
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