Elite Capture, Political Voice and Exclusion from Aid: An Experimental Study

37 Pages Posted: 3 Oct 2008

See all articles by Ben D'Exelle

Ben D'Exelle

University of East Anglia (UEA)

Arno Riedl

Maastricht University; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Netspar

Date Written: September 2008

Abstract

We experimentally study the influence of local information conditions on elite capture and social exclusion in community-based development schemes with heterogeneous groups. Not only information on the distribution of aid resources through community-based schemes, but also information on who makes use of an available punishment mechanism through majority voting may be important. The main results are the following. First, many rich community representatives try to satisfy a political majority who would then abstain from using the punishment mechanism, and exclude those community members whose approval is then not required. The frequency of this exclusion strategy is highest with private information on the distribution and public voting. Second, when voting is public, responders are more reluctant to make use of the punishment mechanism, and representatives who follow the exclusion strategy are more inclined to exclude the poorest responder. Third, punishment is largely ineffective as it induces rich representatives to capture all economic resources. Fourth, if a poor agent takes the representative's role, punishment rates drop, efficiency increases, and final distributions become more equal.

Keywords: distribution of aid, inequality, social exclusion, laboratory experiment

JEL Classification: D72, C91

Suggested Citation

D’Exelle, Ben and Riedl, Arno M., Elite Capture, Political Voice and Exclusion from Aid: An Experimental Study (September 2008). CESifo Working Paper Series No. 2400. Available at SSRN: https://ssrn.com/abstract=1273507

Ben D’Exelle (Contact Author)

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, NR4 7TJ
United Kingdom

Arno M. Riedl

Maastricht University ( email )

Department of Economics (AE1)
P.O. Box 616
Maastricht, 6200 MD
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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