Government performance Flashcards
Are democracies or dictatorships better at producing “good” outcomes?
Democracies tend to do well. When it comes to autocracies, you have big variations. Democracies do not necessarily offer the best outcomes, they are going to be matched by some autocracies, but overall they will always do better.
You need to look at the data to get better insight, so we have to introduce some concepts. The performance goes beyond just “democracy” and “dictatorship”.
Explain the selectorate theory. How does it characterise all governments? (two features)
- The theory is that all leaders are motivated by the desire to gain and maintain office.
It assumes that all people are the same (moves away from democracy-dictatorship classification)
- Political leaders may have other goals as well, but the competitive nature of politics forces them to at least behave as if they desire to gain and maintain office.
Selectorate theory characterises all government in terms of two features:
1) The size of the selectorate is the set of people who can play a role in selecting the leader. Those who have the right to vote.
2) The size of the winning coalition includes those people whose support is necessary for the leader to stay in power. The ones who voted for the person/party that won the election.
Based on this information you can predict how people will behave.
What does the leader need to do in order to stay in power?
In the selectorate theory
Leaders must keep members of their winning coalition happy, not the others.
How? You give them some benefits.
Leaders can distribute:
1) Public goods, which can be consumed by everyone
2) Private goods, which are consumed only by members of the winning coalition (e.g. a higher and better paid position)
The leader chooses a tax rate to generate revenue.
* Most states rely on taxing, rather than revenues from natural sources.
* Not too high so that people do not work or protest
- Democracies are more likely to provide public goods.
How do you choose between giving public goods or private goods?
According to the selectorate theory
The size of the winning coalition determines this.
- When you have a small number of people you depend on, you are able to pay these residents a high level of private goods. But at some point you get to a threshold:
- As the size of the winning coalition increases, the share of the private goods going to each member declines.
- So you are forced by the nature of the system to provide public goods.
- This share of the private goods might become so small that members of WC would get more value from the dictator’s providing public goods.
What is the Loyalty Norm?
Selectorate theory
The loyalty norm is the expectation that members of the winning coalition in autocratic regimes will remain loyal to the leader in exchange for benefits, crucial for the leader’s political survival.
It is a measure of how likely a member of the selectorate (S) is to be part of the winning coalition (W). It’s calculated as the ratio W/S. Dividing winning coalition on selectorate.
Small W/S Ratio: Means that there are few people in the S who are part of the W. Now the individuals in W are crucial for the leader’s survival. They are more likely to be extremely loyal to the leader.
Large W/S Ratio: Means that a significant portion of the S is part of the W. Now individuals in the W are less critical individually. They are less loyal to the leader.
How does the size of the winning coalition and the selectorate affect the economic performance in a country?
Selectorate theory
The larger the winning coalition, the better economic performance. When the winning coalition gets larger you need to buy them off.
The larger the selectorate, the worse economic performance.
Selectorate theory
Why do some autocracies perform well economically? E.g. Singapore
What are some potential benefits and hurdles?
Very important to understand the level of institutionalisations, and the causal mechanisms.
Potential benefits:
* State autonomy. You can decide the direction of where you want the economy to go, you don´t have to spend time and money to convince people of this.
* Mobilisation power (e.g. single-party regimes), you can put all your sources where you need them.
Potential hurdles:
* Lack of stable set of rules. People get anxious and the market will be anxious if you introduce new rules overnight.
* State’s failure to respect contracts
Gandhi
Which policies will the dictator want?
In general, we know that dictators will prefer private goods that benefit him and his ruling coalition over public goods that would benefit the larger citizenry
The problem: policy preferences are not observable. Given that you can’t observe this, Gandhi focuses on some policy dimensions that the dictator and the opposition are guaranteed to disagree on because then it becomes clear what the dictator wants.
Gandhi
What are the policy dimensions that the dictator and the opposition are guaranteed to disagree on?
1) Military spending.
- Providing the military with resources has two benefits for the dictator:
1) It keeps military officers happy and they’ll be less likely to try to overthrow the dictator, giving him more security;
2) It gives the military resources to suppress any mass opposition to the dictator and therefore gives him more security.
- Military spending benefits only a small group of people rather than the masses (private good)
Increased military spending also means lower social spending, which would benefit the broader population (public good)
2) Civil liberties.
- The opposition will favour more civil liberties
- The dictator will have a different preference because when citizens have civil liberties, it is easier for them to organize, mobilize and interact politically
- This makes it more likely that political opposition or alternatives will emerge
Gandhi believes that institutions will have a … impact on civil liberties (speech freedom, press freedom and worker’s rights). What do the results show?
A positive impact.
Results: The presence of institutions has a positive correlation on speech freedom and workers’ rights, but not on press freedom.
Do institutions have an effect on military and social spending?
Gandhi argues that you don’t have true data on this.
Institutions reduce military spending but only over the long-term.
No statistically significant effect of institutions on social spending.
Gandhi
Do institutions have a positive effect on economic outcomes?
Yes, institutions have a positive significant effect on economic growth. Not as robust as she would like it to, but overall a positive effect.
Why? Because institutions, by fostering cooperation, lowering transaction costs, and facilitating information flow, contribute positively to economic outcomes.
Institutions facilitate the spread of information between government officials and private economic agents
* People will have a better idea of what the government wants, whether or not the climate is good to invest in, more certainty of what is going on.
How does Gandhi explain that institutionalisation has a positive effect on freedom of speech and worker’s rights, but no effect on freedom of press?
Freedom of the press is distinct from freedom of speech. When you have freedom of speech, individuals can express opinions within certain boundaries set by the government, and this seems acceptable.
However, the freedom of the press reaches a wider audience. Governments might be cautious about allowing such freedom because they fear it could lead to people organizing and expressing collective discontent
