Small Is Beautiful, at Least in High-Income Democracies : The Distribution of Policy-Making Responsibility, Electoral Accountability, and Incentives for Rent Extraction

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Hamilton, Alexander
dc.date.accessioned
2013-01-29T17:44:31Z
dc.date.available
2013-01-29T17:44:31Z
dc.date.issued
2013-01
dc.date.lastModified
2021-04-23T14:03:06Z
dc.description.abstract
Why is there significant variation in rent extraction among high-income democracies? A large number of political economy investigations into this research question have found that a long period of democratic rule and high per capita income are associated with less rent extraction among public policy-makers. However, attempts to explain the residual, yet significant, variation in rent extraction among countries that possess both these characteristics have been significantly more circumspect and disputed. This paper explores how the distribution of policy-making responsibilities between electorally accountable decision-makers and their electorally unaccountable public policy-making counterparts determines the optimal level of rents extracted in any given high-income democracy context. Specifically, the paper formally models how: (1) variation in the ratio of electorally accountable decision-makers to electorally unaccountable decision-makers, by altering (2) voters' evaluation of incumbent competency, changes (3) the incentives that policy-makers, wishing to remain in office, have to minimize their short-term level of rent extraction in order to signal their competency and hopefully retain office. Given these "career concerns," the theoretical model predicts that an increase or decrease in the ratio will be associated with more or less rent extraction. This hypothesis is then tested empirically. Establishing that the ratio does robustly predict variation in rent extraction is a significant finding, as it can enable analysts to predict how changes in policy-making contexts may affect the incentives for good governance in this sub-set of countries.
en
dc.identifier
http://documents.worldbank.org/curated/en/2013/01/17151026/small-beautiful-least-high-income-democracies-distribution-policy-making-responsibility-electoral-accountability-incentives-rent-extraction
dc.identifier.uri
http://hdl.handle.net/10986/12197
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper; No. 6305
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
ABUSE
dc.subject
ACCOUNTABILITY
dc.subject
AFFILIATED ORGANIZATIONS
dc.subject
BRIBERY
dc.subject
BUREAUCRACY
dc.subject
CAPITALISM
dc.subject
CETERIS PARIBUS
dc.subject
CIVIL LIBERTIES
dc.subject
CIVIL SOCIETY
dc.subject
CONFIDENCE
dc.subject
CONSTITUENTS
dc.subject
CORRUPTION
dc.subject
CORRUPTION PERCEPTION
dc.subject
CORRUPTION PERCEPTION INDEX
dc.subject
CORRUPTION PERCEPTIONS
dc.subject
CORRUPTION PERCEPTIONS INDEX
dc.subject
CPI
dc.subject
CPI SCORE
dc.subject
CPI SCORES
dc.subject
DECISION TREE
dc.subject
DEMOCRACIES
dc.subject
DEMOCRACY
dc.subject
DEVELOPMENT POLICY
dc.subject
DISCRETION
dc.subject
ECONOMIC GROWTH
dc.subject
ECONOMIC OUTCOMES
dc.subject
ECONOMICS
dc.subject
ELECTION
dc.subject
ELECTIONS
dc.subject
ELECTORAL PROCESS
dc.subject
ELECTORATES
dc.subject
EQUILIBRIUM
dc.subject
EXPECTED VALUE
dc.subject
EXPENDITURES
dc.subject
EXPORTS
dc.subject
FREE MEDIA
dc.subject
FREE PRESS
dc.subject
FUTURE RESEARCH
dc.subject
GDP
dc.subject
GOOD GOVERNANCE
dc.subject
GRAFT
dc.subject
INCOME
dc.subject
INCUMBENT
dc.subject
INFLATION
dc.subject
INVESTIGATIONS
dc.subject
LAWS
dc.subject
LOBBYING
dc.subject
LOBBYISTS
dc.subject
MARGINAL UTILITY
dc.subject
MEDIA
dc.subject
MORAL HAZARD
dc.subject
OFFICE HOLDERS
dc.subject
OPTIMIZATION
dc.subject
PER CAPITA INCOME
dc.subject
POLITICAL CONTROL
dc.subject
POLITICAL CORRUPTION
dc.subject
POLITICAL ECONOMY
dc.subject
POLITICAL LIFE
dc.subject
POLITICIAN
dc.subject
POLITICIANS
dc.subject
POSITIVE EFFECTS
dc.subject
PRICE CONTROLS
dc.subject
PRIVATE GAIN
dc.subject
PRIVATE SECTOR
dc.subject
PUBLIC GOODS
dc.subject
PUBLIC OFFICIALS
dc.subject
PUBLIC POLICY
dc.subject
PUBLIC SECTOR
dc.subject
PUBLIC SERVICES
dc.subject
REGRESSION ANALYSES
dc.subject
REGRESSION ANALYSIS
dc.subject
REGULATORY BURDEN
dc.subject
RENT SEEKING
dc.subject
RENTS
dc.subject
TARIFF BARRIERS
dc.subject
TAX
dc.subject
TAX REVENUE
dc.subject
TAXATION
dc.subject
TRADE-OFF
dc.subject
TRANSACTION COSTS
dc.subject
TRANSPARENCY
dc.subject
UNEMPLOYMENT
dc.subject
UTILITY FUNCTION
dc.subject
VOTERS
dc.subject
WAGES
dc.subject
WTO
dc.title
Small Is Beautiful, at Least in High-Income Democracies : The Distribution of Policy-Making Responsibility, Electoral Accountability, and Incentives for Rent Extraction
en
okr.date.disclosure
2013-01-01
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.doctype
Publications & Research
okr.docurl
http://documents.worldbank.org/curated/en/2013/01/17151026/small-beautiful-least-high-income-democracies-distribution-policy-making-responsibility-electoral-accountability-incentives-rent-extraction
okr.globalpractice
Macroeconomics and Fiscal Management
okr.globalpractice
Governance
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-6305
okr.identifier.externaldocumentum
000158349_20130107132037
okr.identifier.internaldocumentum
17151026
okr.identifier.report
WPS6305
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/01/07/000158349_20130107132037/Rendered/PDF/wps6305.pdf
en
okr.topic
Macroeconomics and Economic Growth :: Investment and Investment Climate
okr.topic
Governance :: Parliamentary Government
okr.topic
Economic Theory and Research
okr.topic
Macroeconomics and Economic Growth :: Political Economy
okr.topic
Public Sector Corruption and Anticorruption Measures
okr.topic
Public Sector Development
okr.unit
Development Research Group (DECRG)
okr.volume
1 of 1

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