Clientelism and fiscal redistribution: evidence across countries

Abstract

This article marshals empirical evidence from a cross-section of up to 87 countries to consider the impact of clientelism on fiscal redistribution in the form of direct taxes and public transfers. Clientelism may directly undermine fiscal redistribution towards poorer individuals because their political support is cheaper to buy, political patrons will limit redistribution to keep clients dependent and, moreover, will eschew fiscal policies that target broad categories of citizens based on explicit criteria, and favor instead private benefits that they can disburse to individual clients with a relatively high degree of discretion. The empirical analysis controls for a range of potentially confounding covariates, explores various transmission channels and accounts for the real possibility that more extensive redistributive programs may undermine the strength of clientelism. The results strongly suggest that clientelism is inimical to income redistribution towards the poor through taxes and transfers and, moreover, identify reduced public good provision as one indirect channel through which clientelism may undermine fiscal redistribution