In "Reputation and the Rule of Law in Russia," Timothy Frye examines the impact of private institutions on trade in Russia using survey of 660 business elites in 11 regions across Russia. The survey manipulates the reputation of business partners as well as the reliability of the courts to examine the likelihood of firms engaging in trade. The survey provides a useful way of overcoming endogeneity problem when studying the impact of formal and informal institutions. Frye finds that reputation has a powerful impact on the decision to engage in trade. Moreover, he finds that good courts and good reputation are complementary, not substitutes. Frye provides an intuitive, novel, and useful way to interpret the effects of informal institutions on trade. In addition, the findings regarding the effect and interaction of formal and informal institutions have applications to economic development. However, the paper leads to a number of questions.
First, as Frye notes (24), how generalizable are these findings? Can they be extended beyond Russia? For example, it is plausible that the strength of informal institutions depends on state and culture-specific characteristics such as: state size, ethnic-linguistic homogeneity (related to shared norms, xenophobia, and conflict history), and density of communication and infrastructure networks. These factors would provide a number of testable hypotheses: H1: Greater state/population size will weaken the effect of private institutions on trade. H2: Greater ethno-linguistic homogeneity will increase the positive effect of private institutions on trade. H3: Greater communication and infrastructural density will increase the effect of private institutions on trade.
Second, since Frye's survey applied to Russian business elites trading with other Russians, a question remains as to how well these private institutions can work to foreign investors. Do private institutions also facilitate international trade? If so, are their dynamics different? How can foreign investors gain information on the reliability of their local trading partners? How do these investors overcome information asymmetries?
Third, if private institutions can play a useful role in promoting trade and economic development, how can they be generated and strengthened? Can outside actors play any role in generating sustainable private institutions?
Kitschelt and Wilkinson propose a number of interesting hypotheses about the development of the client-patron linkages as the dominant mode of political organization in democracies. Two of the most interesting from the perspective of understanding the nature of benefit targeting are hypotheses D-4 and S-4, both of which imply that actors in areas where ethnocultural divides have been made salient are likely to demand and be serviced through client-patron links because of lack of trust in non-ethnic based programmatic and patronage parties. In other words, clientalistic linkages emerge from within-group pressures. Strangely, however, both this hypothesis and the broader literature on clientalism, uncritically accepts that the key to winning elections in patronage settings is to target benefits to one’s supporters. There is some formal support for this as Hirano et al. (forthcoming) modify the Dixit-Londregan (1995) swing voter model to show that where there is interparty competition (primaries in their case) large amounts of transfers go to core supporters, with only a residual going out to the swing voters. However in situations where one’s own group is not enough to insure votes it may become necessary to make transfers outside the group. Kasara (2007) shows that African ruling elites tax their own ethnic groups more severely than others precisely because their monitoring costs are higher and they are better able to insure votes from these “loyal” groups with lower transfer costs. Thus, we have three implied hypotheses: 1) ethnocultural fragmentation encourages clientalism in the form of within group transfers 2) ethnocultural fragmentation encourages clientalism in the form of between group vote-buying 3) ethnocultural fragmentation has no independent effect on clientalism.
Testing which of the above interpretations is true would be a tricky, but valuable, contribution to both the literature on ethnic politics and clientalism. Kasara’s paper suggests that there is a direct test of how ethnocultural fractionalization influences levels of clientalism. One need only trace transfers for specific national programs (e.g. education, some form of social payments such as pensions or health care funds, infrastructure investment, etc.) to particular districts controlling for district level variation in income and other demographic factors. If ethnocultural fractionalization increases the incentives for within group clientalism, then one should observe higher flows to areas controlled by co-ethnics of the ruling elite and lower flows to areas controlled by non co-ethnics. If, on the other hand, Kasara is right and clientalism in these countries is more a function of buying support for non co-ethnics we should observe the opposite. Finally, if after controlling for other factors minority status is irrelevant to levels of transfers, it suggests that ethnicity does not matter for clientalism. Assuming one can find a comparable program, one can also develop this simple test into a multi-level model, where one can look at the interaction of the above ethnic effects with level of development to see if Kitschelt and Wilkinson are correct in arguing that ethnocultural fragmentation should induce clientalist linkages regardless of level of development.
References:
Dixit, Avinash and John Londregan (1995). “Redistributive politics and Economic efficiency”. The American Political Science Review 89:4.
Hirano, Shigeo, James M. Snyder, and Michael M. Ting (2009 draft, forthcoming). “Distributive Politics with Primaries” Journal of Politics.
Kasara, Kimuli (2007). “Tax Me If You Can: Ethnic Geography, Democracy, and the Taxation of Agriculture in Africa”. American Political Science Review 101:1.
It is interesting to study the relative importance of public and private institutions for the creation of markets in transition and developing countries. Prof. Frye’s survey-based experiment and analysis suggest that public and private institutions are complements rather than substitutes. Specifically, he examines the effects of reputation, as a private institution, and court, as a public institution, on businessmen’s decision to give credit and the relationship between these two institutions within the effects. Appendix 1 of the paper shows that the steps the responding firms have resorted to for resolving business disputes are quite diverse but they can be broadly divided into two categories: public institutions (Used courts, federal government, regional government, Mayer, Siloviki) and private institutions (Negotiations, business organization, influential business person). It is easily found that the number of public institutions that are used by firms for dispute resolution is greater than the one of private institutions, at least in terms of variety. I would believe that this is common in transition countries where administrative/public machine has been quite powerful while market/private mechanism is still premature. Accordingly, respondents in those countries may have more past experiences of using public institutions than private institutions to solve disputes. In other words, the accessibility might be different for public institutions and private institutions in transitional countries. This difference is likely to affect the effectiveness of public and private institutions in practice. Considering this, I would take the potentially different accessibilities of public and private institutions into account when testing the proposition that public and private institutions are complements for dispute settlement in transition countries. One way I can think of to do so, given the information about the survey in the paper, is first to calculate the frequencies (in the form of percentage) that each region’s responding firms used public and private institutions respectively as the proxies of accessibilities of those two institutions in the region, and then to include them in the regression models as control variables.
Kitschelt and Wilkinson describe the conditions under which politicians choose to employ specific linkage mechanisms. Politicians employ clientelistic targeting and offer private and club goods when monitoring is easy and voting compliance can be enforced by sanctioning free-riding. Where monitoring and enforcement are difficult, politicians prefer to target a wider audience based on a programmatic linkage offering public and club goods. While the authors discuss when we should expect clientelistic versus programmatic parties, under what circumstances do politicians employ both clientelistic and programmatic linkage mechanisms? In other words, where monitoring and enforcement are possible, what determines particularly how club goods are targeted if they can be employed both in clientelistic and programmatic linkage? The authors furthermore exert that rather than formal democratic institutions, whether politicians resort to one strategy over another is better explained by informal institutions and the interaction among economic development levels, party competition, ethnic heterogeneity, and political economy. However, the question rises as to how particular electoral systems might facilitate one linkage mechanism over another. Where politicians find ways around formal institutions that might initially favor a specific linkage strategy, what are the trade-offs for doing so? What are the specific processes by which exogenous electoral institutions are circumvented when incentives exist to establish alternative linkage mechanisms not favored by the electoral system? Finally, the authors discuss how economic development levels and prior democratic legacy determine politicians’ linkage strategies. In turn, what are the effects of certain linkage strategies or portfolios on democracy? The extent to which programmatic versus clientelistic parties affect democratic consolidation or democratic stability during civil conflict would be significant for the study of institutions – formal and informal – in transitioning democracies and intrastate, and especially ethnic competition.
There exist few (if any) large N empirical studies on the determinants of clientelist linkages, and the main reason for this is perhaps a lack of consensus on adequate (e.g. cross nationally comparable) measures of “clientelism”. What types of outcomes should we be looking at to decide whether a polity or party system is more (or less) clientelistic than another? One strand of the theoretical literature looks at the policy outcomes that may result from different party voter linkage strategies. For example, Kitschelt and Wilkinson make the distinction between private, public and club goods. In particular, the authors expect different combinations of the three goods under different linkage strategies, with private goods weighting more under clientelist party systems.
At the theoretical/conceputal level, this threefold classification makes sense. However, it is much harder to come up with cross nationally comparable measures of them. One way to escape this “trap” is to look systematically at the composition of public budgets, the main tool for allocating scarce public resources in modern societies. It is in the context of the budget process that politicians and parties must make tradeoffs between different policy priorities. Thus, it would be interesting to construct an index of the “representativeness” of the budget, that tries to capture whether public expenditures are designed to favor the population at large (public goods) or whether they favor only a subset of the population (private/club goods). This could be done by looking at the weight of different budget items on the total budget (e.g. the amounts of money spent for different items) that would reflect more or less closely the concepts of public vs private/club goods. Additionally, the regional allocation of expenditures would be another issue to address in particular in the context of the study of club goods determinants.
Doing such an exercise for many countries is a laborious undertaking. However, unless we develop comparable measures of "clientelism", it will remain difficult to empirically test many of the theories out there on the determinants of clientelist strategies across countries.
Frye (forthcoming) employs a survey based experiment to determine the relative importance of private institutions (reputation) and public institutions (perceived quality of courts) to the propensity for trade. I was particularly interested in this analysis for its methodological approach, but also for its substantive investigation of the complementary versus substitutive nature of the relationship between public and private institutions. This is a topic of significant debate amongst development practitioners. Indeed one of the most frequent and forceful arguments against the application of ‘community driven development’ approaches (i.e. methodologies whereby community organization manage and implement development interventions on their own behalf) has been that these forms of interventions that rely on actions by collectives of private citizens effectively ‘crowd-out’ and ‘undermine’ public sector action through local governments. My own empirical observation suggests that this is not the case, and it was comforting to see empirical evidence to support this perception.
In his paper Frye refers to the findings of Migdal (1988) that “characterizes …polities as have strong societies and weak states” (7). Without knowing the details of this specific research I think it would be interesting to examine this hypothesis at the macro level using cross country data – testing whether there is indeed a correlation between the strength of civil society and the weakness of states. The dependent variable would be ‘state weakness (or strength)’. A composite measure could be crafted to measure the efficacy and stability of the state (for simplicity this could be examined at the national level only). The independent variable would be a similar national level composite measure, designed to measure the strength of civil society – i.e. the number and strength of linkages between citizens, presence and power of interest groups etc. A regression analysis could then be performed to determine whether there is a significant correlation between the variables. If Frye’s theory holds, one would expect a negative correlation (i.e. strong societies reinforce and strengthen – not weaken - the state.
Cox and McCubbins (1993) present a compelling view of parties in the U.S. House of Representatives, one that conceptualizes them as cartels that dominate the lawmaking process. In addition to ensuring a particular party’s dominance over the legislative process, these cartels also contain internal management mechanisms that seek to prevent cheating by members of the party. Parties are, in this sense, an answer to a coordination problem among individual legislators in single-member district polities, whose personal (or constituent) interests may not align with the party or the broader electorate. This analysis is interesting, yet insufficient for understanding party dynamics in a comparative context. We cannot fault Cox and McCubbins for leaving unexplored the portability of their model since they specifically address parties in a U.S. context. Applying their model to the study of party dynamics across electoral systems would be enlightening.
In particular, do parties in PR systems with multimember districts exhibit cartel behavior similar to that in the U.S. Congress? If we assume that PR legislators are primarily (or at least heavily) motivated by a desire to get reelected, then we can explore the relationship between the probability of reelection (R) and the probability of a legislator’s party winning a majority of seats in parliament (M). Cox and McCubbins point out that, in the absence of a party leadership, individual Congresspersons will vote in the interest of their district and not in the interest of the collective. For members of parliament in PR systems, however, this tension would seem less important. In an extreme case where the polity consists of one district (e.g., Israel), we would expect an individual MP’s (or MK’s) chances of reelection to depend minimally on the personal characteristics of the legislator and mostly on the performance of the party. Since the probability of winning a majority is also dependent on the actions of the party in this single-district example, we would expect the parties to act less like cartels of legislators with individually disparate interests and more like unified and coherent political actors.
While this may seem to be an obvious reiteration of the comparative work on party systems, the distinction is interesting for understanding the policymaking process. A consequence of the unified nature of PR parties is that there are generally more parties in the PR polity, and to govern as a majority, it is often necessary to build coalitions. In effect, coalitions are a PR system’s equivalent “legislative cartel.” The difference between the U.S. Congress’s “cartel” and the “cartel” of my hypothetical single-district PR system is size. Under some conditions, members of cartels have incentives to cheat; these incentives become stronger as the number of members increases. Legislative cartels of a few parties may then be easier to keep together than legislative cartels of a couple hundred individual legislators. It has been a common observation that collectively oriented policymaking in the United States is more difficult to achieve than in PR systems such as Sweden (Steinmo 1989). Furthermore, other scholars have noted that PR systems seem to produce polices targeted towards broader groups of constituents, while plurality systems produce policies targeted towards more narrow constituencies (Persson and Tabellini 2004 and McGillivray 2004). On broad policy issues such as welfare state reform, therefore, Cox and McCubbins offer an interesting approach for analyzing policymaking processes, one that takes advantage of the rich economic scholarship on cartel behavior.
Works Cited:
Gary Cox and Matthew D. McCubbins. 1993. Legislative Leviathan: Party Government in the House. Cambridge UP.
Fiona McGillivray. 2004. Privileging Industry: The COmparative Politics of Trade and INdustrial Policy. Princeton, NJ: Princeton UP.
Torsten Person and Guido Tabellini. 2004. "Constitutions and Economic Policy." The Journal of Economic Perspectives, Vol. 18:1, 75-98.
Sven Steinmo. 1989. “Political Institutions and Tax Policy in the United States, Sweden, and Britain.” World Politics, Vol. 41:4 (July), 500-535.
How can we apply and test Cox and McCubbin’s (1993) “cartel” theory in a comparative context outside the United States? Can we apply the theoretical model Cox et al. put forth to explain why candidates follow the collective aims of their parties generally? The United States’ party system differs from most countries because, among other reasons, 1) it operates under a two party system; 2) there is a division between choice for the executive and the legislature; and 3) legislators have large amounts of autonomy over their career. These differences make candidates more independent from parties than in other systems, particularly unitary parliamentary systems and indeed many presidential systems as well. However, cartel theory could perhaps be applied to entities where party does not have complete control. For instance, it could perhaps be applied to political systems which party power is not merely concentrated at the national level but is dispersed between different levels, between divisions of the party or between states (or other federal/state divisions). Although I do not know enough about the internal workings of many countries, some of the Latin American countries such as Mexico may be ideal candidates for application of cartel theory because their systems are more similar to ours than parliamentary systems. To apply the theory we would first need to identify the collective good, and establish that the collective good is something of value to the politicians. For instance, in the U.S. context, Cox and McCubbins showed that there is a common element in the electoral chances of House members of the same party and that House members recognize this. Then we would need to assess how the party or other entity fostered collective action. What kind of selective incentives were offered? What are the tools in which the majority party can influence behavior? Do the selective incentives offered in fact foster the collective action desired? Does the majority power use its power to obtain benefits for the individuals to whom it has offered selective incentives? We could further assess the extent to which the majority party gets “rolled,” that is if a majority votes against the bill but the bill nevertheless passes. Low roll rates would be consistent with cartel theory.
Kitschelt and Wilkinson establish a framework for strategies of politician-citizen linkage that does not hinge on formal institutions, but on the interaction of economic modernization, political economy, party competition and ethnic heterogeneity. To what extent is it helpful to use this framework to examine advocacy organizations that run parallel to party politics--but for sociopolitical reason fill an important representative role for groups that are not fully enfranchised?
Muslim councils in Western Europe--my current research focus--fit this description. Several elements of Kitschelt and Wilkinson's framework may be helpful in analyzing them. While the councils do not generally deal in material goods of any kind, they are involved in the procurement--through negotiation and consultation with governments and other public institutions--of a significant range of social, cultural and sometimes political goods to the growing Muslim minorities of European states. Kitschelt and Wilkinson's concept of 'club goods' are helpful here, since many of these goods require compromises effectively limiting some majority-oriented goods. Since the people they represent are generally included in state welfare systems (even when they are not citizens and therefore have limited political rights), there is not a significant material dimension; and since they are not elected, and the goods they advocate for are not naturally targeted to one portion of Muslim communities, they do not widely engage in clientelism. Thus, the strategic choice of which linkage to adopt is not really salient to them.
However, the issues of 'competition' and 'development,' as conceptualized by Kitschelt and Wilkinson, and to some extent by Medina and Stokes, may be more relevant. First, there is the consideration that the councils' ability to provide those goods, and thus their overall reason to exist and recruit support from Muslim organizations and individuals, depends on two factors: do they represent a broad enough portion of Muslims to be a worthwhile partner for the government (and, in cases with a formalized selection process, for leaders to retain their roles)? and, are they moderate enough to be a politically viable partner for the government? Paradoxically, these two play against one another. Too pro-government, and they risk losing support from less reformist sections of the Muslim population, and face more competition from rival organizations who would assume an interlocutor-type-role. Not reformist enough, and they lose face with the government and with the public at large. Thus, the frameworks of competition and good provision presented here are relevant to analyzing these kinds of organizations.
However, the larger question is whether this frame of analysis really lends itself at all to study of organizations that would seek to represent and provide goods to select populations, but who do not depend on voting to maintain power.
Party system comprises formal and informal institutions. These institutions have great implication for the state’s welfare distribution. Kitschelt and Wilkinson (2006) provide an economic explanation about how the reelection-seeking party forms its strategic linkage to the constituency. The cost of monitor and the opportunity cost of spoils determine if the linkage is clientelistic or programmatic, and the later is highly correlated with economic development. For instance, rich people are less likely to be bought off by small spoils, and when the spoils are too costly, the party is most likely to give up on the strategy. The service under clientelistic linkage is private or club goods, which is distributed to only certain population; whereas programmatic linkage delivers public or club goods. According to Kitschelt and Wilkinson, informal institutions such as social network and ethnocultural division facilitate the differential welfare distribution of clientelistic linkage due to the factors of monitor and the separate group’s perception of fairness. I would like to point out that the relations between formal and informal institutions are two-way. Formal electoral institutions also play an important role in the party’s strategic choice, which is neglected by the authors. For instance, Japan’s clientelism is greatly influenced by its electoral rules. Before 1994, SNTV/MMD had led to intra-party competition and the candidates often sought to develop patron-client relations with specific organized groups, which had resulted in fractionalized party and weak party leadership. The welfare distribution before 1994 was thus fragmentary and clientelistic. After SMD was instituted in 1994, a candidate has to appeal to unorganized voters (the majority) in order to win the election. The importance of personal vote declines following the increasing electoral clout of the party leader. Under the current electoral rule, programmatic linkage is more likely to be adopted as the party strategy. This development is compatible with Cox and McCubbins’ theory of the legislative parties, according to which the candidates have shared interests regarding the party’s overall image.
I thought that the Kitschelt and Wilkinson piece was an important piece of theory building on a poorly understood topic. One feature that particularly interested me; the continued assumption of a 'progression' of political systems from a client/patronage basis to a policy platform basis. I would aver that political systems, even very developed ones, have heterogeneity along patronage-policy dimensions across various policy issues, public offices, segments of the population and electoral cycles. It is a mistake I think, to assume that clientilism does not co-exist with policy-motivated voters, or that patronage networks cannot develop themselves in more modern democracies even in the presence of policy-oriented publics, stringent anti-patronage social mores and institutions favourable to policy promises as opposed to patronage.
I think a lot of the heterogeneity in this sense can be explained by the type and value of the public good that masses forego when they engage in patronage behaviour. Lizzeri and Persico demonstrate using a formal model that electorally motivated politicans will endogenously provide public goods when the value of a public good is particularly high for the population, and will target private goods to segments of the population when the value of a public good is very low. Where public goods and private perks are of similar value to citizens, electoral incentives make a big difference in determining the efficiency of the outcome. It is possible that, given the weak states that seem to co-exist with clientilist networks, that politicians in patronage-based societies do not have any prospect of offering a high-value public good (e.g. law and order, contract enforcement, high-quality infrastructure, national social insurance), and so resort to patronage. As states develop economically, it may be that the public goods that enter a governments policy menu become sufficiently attractive as to motivate the diminuition of patronage systems. This is not to say that patronage may not continue in areas of society or public policy where the quality of public goods on offer is not as high. Such explanations could provide a channel between economic development and policy-oriented publics that is absent from Kitschelt and Wilkinson's discussion.
Lizzeri and Persico, 'The Provision of Public Goods Under Alternative Electoral Incentives', American Economic Review, 2000.
Leanne Tyler Comparing Institutions—Week 12: Parties and Informal Institutions
In “Citizen-Political Linkages,” Kitschelt and Wikinson identify three causal mechanisms that impact the nature of principal-agent relations between politicians and various sectors of the civilian population: competitiveness of democratic elections, political-economic governance structures, and ethno-cultural divides. The theoretical logic underpinning each of these causal mechanisms provides a unique opportunity to test the claims of the authors.
In reference to the first causal mechanism (competitiveness of democratic relations), Kitschelt and Wikinson hypothesize that a more competitive and inclusive political arena will significantly change the nature of patronage-based politics. According to the authors, maintaining patronage ties with individuals or small collectivities of citizens becomes more difficult with the influx of new actors. For example, in situations of increased voter participation, political leaders are put in the difficult position of having to monitor the compliance of a larger portion of the population. As a result, it simply becomes too costly to mobilize specific individuals and more expedient to mobilize nationally-based sectors of the population. Many states currently experiencing democratic transitions would provide an interesting test of the causal logic. For example, one could use the basic polity score as a guide for varying degrees of electoral competitiveness and compare that against patronage-based politics within the state. One would expect to see that with increased levels of competitiveness that individual-based mobilization would be replaced with sector-based (class or ethnic) mobilization. Another interesting relationship to examine with regards to this mechanism would the impact of specific regime types and the nature of patronage politics (one-party or multi-party authoritarianism).
The second causal mechanism (political economic governance structures) predicts that specific types of institutional structures will significantly impact patronage-based politics. For example, states with fairly large bureaucracies or public sectors may create an environment that is more conducive to clientelism than states that lack these types of governing structures. This argument forms an essential part of the justification for governance-reform offered by organizations such as the World Bank and the International Monetary Fund. This is a difficult causal mechanism to test because policies such as privatization which presumable “break” apart large states often result in the continuation of clientilist based ties. For example, in the late 1980s and early 1990s many Middle Eastern states were pressured by various international financial institutions to implement strict “privatization” as a means of combating pervasive “crony capitalism.” In the end, many politicians simply switched their ownership from public enterprises to private enterprises. Thus, the actors remained the same while the context was marginally modified. Still, policy reforms in the Middle East or Latin America (for instance) would provide an interesting opportunity to examine the manner in which clientilist-based relations change and preserver under different institutional settings. Changes in state governing structures (federal versus unitary) would also be another interesting causal mechanism to examine.
Lastly, the third causal mechanism ethno-cultural divides draws a connection between the demographic concentration of a group and clientelism. An interesting test of this mechanism would be secessionist movements that result in a clear divide between the “rump” state and the breakaway region. In the case of the breakaway region, minority groups become the new ruling majority and this can have interesting implications for the ways that groups mobilize their constituency base. Here, the provisions of private goods to one’s fellow ethnic group may carry less weight as the new constituency based is more homogenous than during the pre-secessionist period. Of course, countries such as Bosnia (with the implementation of federalist structure) or Serbia would be valuable cases to examine.
In "Reputation and the Rule of Law in Russia," Timothy Frye examines the impact of private institutions on trade in Russia using survey of 660 business elites in 11 regions across Russia. The survey manipulates the reputation of business partners as well as the reliability of the courts to examine the likelihood of firms engaging in trade. The survey provides a useful way of overcoming endogeneity problem when studying the impact of formal and informal institutions. Frye finds that reputation has a powerful impact on the decision to engage in trade. Moreover, he finds that good courts and good reputation are complementary, not substitutes. Frye provides an intuitive, novel, and useful way to interpret the effects of informal institutions on trade. In addition, the findings regarding the effect and interaction of formal and informal institutions have applications to economic development. However, the paper leads to a number of questions.
ReplyDeleteFirst, as Frye notes (24), how generalizable are these findings? Can they be extended beyond Russia? For example, it is plausible that the strength of informal institutions depends on state and culture-specific characteristics such as: state size, ethnic-linguistic homogeneity (related to shared norms, xenophobia, and conflict history), and density of communication and infrastructure networks. These factors would provide a number of testable hypotheses:
H1: Greater state/population size will weaken the effect of private institutions on trade.
H2: Greater ethno-linguistic homogeneity will increase the positive effect of private institutions on trade.
H3: Greater communication and infrastructural density will increase the effect of private institutions on trade.
Second, since Frye's survey applied to Russian business elites trading with other Russians, a question remains as to how well these private institutions can work to foreign investors. Do private institutions also facilitate international trade? If so, are their dynamics different? How can foreign investors gain information on the reliability of their local trading partners? How do these investors overcome information asymmetries?
Third, if private institutions can play a useful role in promoting trade and economic development, how can they be generated and strengthened? Can outside actors play any role in generating sustainable private institutions?
I am posting an essay on "Legislative Leviathan" on courseworks.
ReplyDeleteKitschelt and Wilkinson propose a number of interesting hypotheses about the development of the client-patron linkages as the dominant mode of political organization in democracies. Two of the most interesting from the perspective of understanding the nature of benefit targeting are hypotheses D-4 and S-4, both of which imply that actors in areas where ethnocultural divides have been made salient are likely to demand and be serviced through client-patron links because of lack of trust in non-ethnic based programmatic and patronage parties. In other words, clientalistic linkages emerge from within-group pressures. Strangely, however, both this hypothesis and the broader literature on clientalism, uncritically accepts that the key to winning elections in patronage settings is to target benefits to one’s supporters. There is some formal support for this as Hirano et al. (forthcoming) modify the Dixit-Londregan (1995) swing voter model to show that where there is interparty competition (primaries in their case) large amounts of transfers go to core supporters, with only a residual going out to the swing voters. However in situations where one’s own group is not enough to insure votes it may become necessary to make transfers outside the group. Kasara (2007) shows that African ruling elites tax their own ethnic groups more severely than others precisely because their monitoring costs are higher and they are better able to insure votes from these “loyal” groups with lower transfer costs. Thus, we have three implied hypotheses: 1) ethnocultural fragmentation encourages clientalism in the form of within group transfers 2) ethnocultural fragmentation encourages clientalism in the form of between group vote-buying 3) ethnocultural fragmentation has no independent effect on clientalism.
ReplyDeleteTesting which of the above interpretations is true would be a tricky, but valuable, contribution to both the literature on ethnic politics and clientalism. Kasara’s paper suggests that there is a direct test of how ethnocultural fractionalization influences levels of clientalism. One need only trace transfers for specific national programs (e.g. education, some form of social payments such as pensions or health care funds, infrastructure investment, etc.) to particular districts controlling for district level variation in income and other demographic factors. If ethnocultural fractionalization increases the incentives for within group clientalism, then one should observe higher flows to areas controlled by co-ethnics of the ruling elite and lower flows to areas controlled by non co-ethnics. If, on the other hand, Kasara is right and clientalism in these countries is more a function of buying support for non co-ethnics we should observe the opposite. Finally, if after controlling for other factors minority status is irrelevant to levels of transfers, it suggests that ethnicity does not matter for clientalism. Assuming one can find a comparable program, one can also develop this simple test into a multi-level model, where one can look at the interaction of the above ethnic effects with level of development to see if Kitschelt and Wilkinson are correct in arguing that ethnocultural fragmentation should induce clientalist linkages regardless of level of development.
References:
Dixit, Avinash and John Londregan (1995). “Redistributive politics and Economic efficiency”. The American Political Science Review 89:4.
Hirano, Shigeo, James M. Snyder, and Michael
M. Ting (2009 draft, forthcoming). “Distributive Politics with Primaries” Journal of Politics.
Kasara, Kimuli (2007). “Tax Me If You Can: Ethnic Geography, Democracy, and the Taxation of
Agriculture in Africa”. American Political Science Review 101:1.
It is interesting to study the relative importance of public and private institutions for the creation of markets in transition and developing countries. Prof. Frye’s survey-based experiment and analysis suggest that public and private institutions are complements rather than substitutes. Specifically, he examines the effects of reputation, as a private institution, and court, as a public institution, on businessmen’s decision to give credit and the relationship between these two institutions within the effects. Appendix 1 of the paper shows that the steps the responding firms have resorted to for resolving business disputes are quite diverse but they can be broadly divided into two categories: public institutions (Used courts, federal government, regional government, Mayer, Siloviki) and private institutions (Negotiations, business organization, influential business person). It is easily found that the number of public institutions that are used by firms for dispute resolution is greater than the one of private institutions, at least in terms of variety. I would believe that this is common in transition countries where administrative/public machine has been quite powerful while market/private mechanism is still premature. Accordingly, respondents in those countries may have more past experiences of using public institutions than private institutions to solve disputes. In other words, the accessibility might be different for public institutions and private institutions in transitional countries. This difference is likely to affect the effectiveness of public and private institutions in practice. Considering this, I would take the potentially different accessibilities of public and private institutions into account when testing the proposition that public and private institutions are complements for dispute settlement in transition countries. One way I can think of to do so, given the information about the survey in the paper, is first to calculate the frequencies (in the form of percentage) that each region’s responding firms used public and private institutions respectively as the proxies of accessibilities of those two institutions in the region, and then to include them in the regression models as control variables.
ReplyDeleteKitschelt and Wilkinson describe the conditions under which politicians choose to employ specific linkage mechanisms. Politicians employ clientelistic targeting and offer private and club goods when monitoring is easy and voting compliance can be enforced by sanctioning free-riding. Where monitoring and enforcement are difficult, politicians prefer to target a wider audience based on a programmatic linkage offering public and club goods. While the authors discuss when we should expect clientelistic versus programmatic parties, under what circumstances do politicians employ both clientelistic and programmatic linkage mechanisms? In other words, where monitoring and enforcement are possible, what determines particularly how club goods are targeted if they can be employed both in clientelistic and programmatic linkage?
ReplyDeleteThe authors furthermore exert that rather than formal democratic institutions, whether politicians resort to one strategy over another is better explained by informal institutions and the interaction among economic development levels, party competition, ethnic heterogeneity, and political economy. However, the question rises as to how particular electoral systems might facilitate one linkage mechanism over another. Where politicians find ways around formal institutions that might initially favor a specific linkage strategy, what are the trade-offs for doing so? What are the specific processes by which exogenous electoral institutions are circumvented when incentives exist to establish alternative linkage mechanisms not favored by the electoral system?
Finally, the authors discuss how economic development levels and prior democratic legacy determine politicians’ linkage strategies. In turn, what are the effects of certain linkage strategies or portfolios on democracy? The extent to which programmatic versus clientelistic parties affect democratic consolidation or democratic stability during civil conflict would be significant for the study of institutions – formal and informal – in transitioning democracies and intrastate, and especially ethnic competition.
There exist few (if any) large N empirical studies on the determinants of clientelist linkages, and the main reason for this is perhaps a lack of consensus on adequate (e.g. cross nationally comparable) measures of “clientelism”. What types of outcomes should we be looking at to decide whether a polity or party system is more (or less) clientelistic than another?
ReplyDeleteOne strand of the theoretical literature looks at the policy outcomes that may result from different party voter linkage strategies. For example, Kitschelt and Wilkinson make the distinction between private, public and club goods. In particular, the authors expect different combinations of the three goods under different linkage strategies, with private goods weighting more under clientelist party systems.
At the theoretical/conceputal level, this threefold classification makes sense. However, it is much harder to come up with cross nationally comparable measures of them. One way to escape this “trap” is to look systematically at the composition of public budgets, the main tool for allocating scarce public resources in modern societies. It is in the context of the budget process that politicians and parties must make tradeoffs between different policy priorities. Thus, it would be interesting to construct an index of the “representativeness” of the budget, that tries to capture whether public expenditures are designed to favor the population at large (public goods) or whether they favor only a subset of the population (private/club goods). This could be done by looking at the weight of different budget items on the total budget (e.g. the amounts of money spent for different items) that would reflect more or less closely the concepts of public vs private/club goods. Additionally, the regional allocation of expenditures would be another issue to address in particular in the context of the study of club goods determinants.
Doing such an exercise for many countries is a laborious undertaking. However, unless we develop comparable measures of "clientelism", it will remain difficult to empirically test many of the theories out there on the determinants of clientelist strategies across countries.
I have posted my response paper on Courseworks.
ReplyDeleteFrye (forthcoming) employs a survey based experiment to determine the relative importance of private institutions (reputation) and public institutions (perceived quality of courts) to the propensity for trade. I was particularly interested in this analysis for its methodological approach, but also for its substantive investigation of the complementary versus substitutive nature of the relationship between public and private institutions. This is a topic of significant debate amongst development practitioners. Indeed one of the most frequent and forceful arguments against the application of ‘community driven development’ approaches (i.e. methodologies whereby community organization manage and implement development interventions on their own behalf) has been that these forms of interventions that rely on actions by collectives of private citizens effectively ‘crowd-out’ and ‘undermine’ public sector action through local governments. My own empirical observation suggests that this is not the case, and it was comforting to see empirical evidence to support this perception.
ReplyDeleteIn his paper Frye refers to the findings of Migdal (1988) that “characterizes …polities as have strong societies and weak states” (7). Without knowing the details of this specific research I think it would be interesting to examine this hypothesis at the macro level using cross country data – testing whether there is indeed a correlation between the strength of civil society and the weakness of states. The dependent variable would be ‘state weakness (or strength)’. A composite measure could be crafted to measure the efficacy and stability of the state (for simplicity this could be examined at the national level only). The independent variable would be a similar national level composite measure, designed to measure the strength of civil society – i.e. the number and strength of linkages between citizens, presence and power of interest groups etc. A regression analysis could then be performed to determine whether there is a significant correlation between the variables. If Frye’s theory holds, one would expect a negative correlation (i.e. strong societies reinforce and strengthen – not weaken - the state.
Cox and McCubbins (1993) present a compelling view of parties in the U.S. House of Representatives, one that conceptualizes them as cartels that dominate the lawmaking process. In addition to ensuring a particular party’s dominance over the legislative process, these cartels also contain internal management mechanisms that seek to prevent cheating by members of the party. Parties are, in this sense, an answer to a coordination problem among individual legislators in single-member district polities, whose personal (or constituent) interests may not align with the party or the broader electorate. This analysis is interesting, yet insufficient for understanding party dynamics in a comparative context. We cannot fault Cox and McCubbins for leaving unexplored the portability of their model since they specifically address parties in a U.S. context. Applying their model to the study of party dynamics across electoral systems would be enlightening.
ReplyDeleteIn particular, do parties in PR systems with multimember districts exhibit cartel behavior similar to that in the U.S. Congress? If we assume that PR legislators are primarily (or at least heavily) motivated by a desire to get reelected, then we can explore the relationship between the probability of reelection (R) and the probability of a legislator’s party winning a majority of seats in parliament (M). Cox and McCubbins point out that, in the absence of a party leadership, individual Congresspersons will vote in the interest of their district and not in the interest of the collective. For members of parliament in PR systems, however, this tension would seem less important. In an extreme case where the polity consists of one district (e.g., Israel), we would expect an individual MP’s (or MK’s) chances of reelection to depend minimally on the personal characteristics of the legislator and mostly on the performance of the party. Since the probability of winning a majority is also dependent on the actions of the party in this single-district example, we would expect the parties to act less like cartels of legislators with individually disparate interests and more like unified and coherent political actors.
While this may seem to be an obvious reiteration of the comparative work on party systems, the distinction is interesting for understanding the policymaking process. A consequence of the unified nature of PR parties is that there are generally more parties in the PR polity, and to govern as a majority, it is often necessary to build coalitions. In effect, coalitions are a PR system’s equivalent “legislative cartel.” The difference between the U.S. Congress’s “cartel” and the “cartel” of my hypothetical single-district PR system is size. Under some conditions, members of cartels have incentives to cheat; these incentives become stronger as the number of members increases. Legislative cartels of a few parties may then be easier to keep together than legislative cartels of a couple hundred individual legislators. It has been a common observation that collectively oriented policymaking in the United States is more difficult to achieve than in PR systems such as Sweden (Steinmo 1989). Furthermore, other scholars have noted that PR systems seem to produce polices targeted towards broader groups of constituents, while plurality systems produce policies targeted towards more narrow constituencies (Persson and Tabellini 2004 and McGillivray 2004). On broad policy issues such as welfare state reform, therefore, Cox and McCubbins offer an interesting approach for analyzing policymaking processes, one that takes advantage of the rich economic scholarship on cartel behavior.
Works Cited:
Gary Cox and Matthew D. McCubbins. 1993. Legislative Leviathan: Party Government in the House. Cambridge UP.
Fiona McGillivray. 2004. Privileging Industry: The COmparative Politics of Trade and INdustrial Policy. Princeton, NJ: Princeton UP.
Torsten Person and Guido Tabellini. 2004. "Constitutions and Economic Policy." The Journal of Economic Perspectives, Vol. 18:1, 75-98.
Sven Steinmo. 1989. “Political Institutions and Tax Policy in the United States, Sweden, and Britain.” World Politics, Vol. 41:4 (July), 500-535.
I have posted a short paper on courseworks.
ReplyDeleteHow can we apply and test Cox and McCubbin’s (1993) “cartel” theory in a comparative context outside the United States? Can we apply the theoretical model Cox et al. put forth to explain why candidates follow the collective aims of their parties generally? The United States’ party system differs from most countries because, among other reasons, 1) it operates under a two party system; 2) there is a division between choice for the executive and the legislature; and 3) legislators have large amounts of autonomy over their career. These differences make candidates more independent from parties than in other systems, particularly unitary parliamentary systems and indeed many presidential systems as well. However, cartel theory could perhaps be applied to entities where party does not have complete control. For instance, it could perhaps be applied to political systems which party power is not merely concentrated at the national level but is dispersed between different levels, between divisions of the party or between states (or other federal/state divisions). Although I do not know enough about the internal workings of many countries, some of the Latin American countries such as Mexico may be ideal candidates for application of cartel theory because their systems are more similar to ours than parliamentary systems. To apply the theory we would first need to identify the collective good, and establish that the collective good is something of value to the politicians. For instance, in the U.S. context, Cox and McCubbins showed that there is a common element in the electoral chances of House members of the same party and that House members recognize this. Then we would need to assess how the party or other entity fostered collective action. What kind of selective incentives were offered? What are the tools in which the majority party can influence behavior? Do the selective incentives offered in fact foster the collective action desired? Does the majority power use its power to obtain benefits for the individuals to whom it has offered selective incentives? We could further assess the extent to which the majority party gets “rolled,” that is if a majority votes against the bill but the bill nevertheless passes. Low roll rates would be consistent with cartel theory.
ReplyDeleteI've posted a paper on courseworks
ReplyDeleteKitschelt and Wilkinson establish a framework for strategies of politician-citizen linkage that does not hinge on formal institutions, but on the interaction of economic modernization, political economy, party competition and ethnic heterogeneity. To what extent is it helpful to use this framework to examine advocacy organizations that run parallel to party politics--but for sociopolitical reason fill an important representative role for groups that are not fully enfranchised?
ReplyDeleteMuslim councils in Western Europe--my current research focus--fit this description. Several elements of Kitschelt and Wilkinson's framework may be helpful in analyzing them. While the councils do not generally deal in material goods of any kind, they are involved in the procurement--through negotiation and consultation with governments and other public institutions--of a significant range of social, cultural and sometimes political goods to the growing Muslim minorities of European states. Kitschelt and Wilkinson's concept of 'club goods' are helpful here, since many of these goods require compromises effectively limiting some majority-oriented goods. Since the people they represent are generally included in state welfare systems (even when they are not citizens and therefore have limited political rights), there is not a significant material dimension; and since they are not elected, and the goods they advocate for are not naturally targeted to one portion of Muslim communities, they do not widely engage in clientelism. Thus, the strategic choice of which linkage to adopt is not really salient to them.
However, the issues of 'competition' and 'development,' as conceptualized by Kitschelt and Wilkinson, and to some extent by Medina and Stokes, may be more relevant. First, there is the consideration that the councils' ability to provide those goods, and thus their overall reason to exist and recruit support from Muslim organizations and individuals, depends on two factors: do they represent a broad enough portion of Muslims to be a worthwhile partner for the government (and, in cases with a formalized selection process, for leaders to retain their roles)? and, are they moderate enough to be a politically viable partner for the government? Paradoxically, these two play against one another. Too pro-government, and they risk losing support from less reformist sections of the Muslim population, and face more competition from rival organizations who would assume an interlocutor-type-role. Not reformist enough, and they lose face with the government and with the public at large. Thus, the frameworks of competition and good provision presented here are relevant to analyzing these kinds of organizations.
However, the larger question is whether this frame of analysis really lends itself at all to study of organizations that would seek to represent and provide goods to select populations, but who do not depend on voting to maintain power.
Party system comprises formal and informal institutions. These institutions have great implication for the state’s welfare distribution. Kitschelt and Wilkinson (2006) provide an economic explanation about how the reelection-seeking party forms its strategic linkage to the constituency. The cost of monitor and the opportunity cost of spoils determine if the linkage is clientelistic or programmatic, and the later is highly correlated with economic development. For instance, rich people are less likely to be bought off by small spoils, and when the spoils are too costly, the party is most likely to give up on the strategy. The service under clientelistic linkage is private or club goods, which is distributed to only certain population; whereas programmatic linkage delivers public or club goods.
ReplyDeleteAccording to Kitschelt and Wilkinson, informal institutions such as social network and ethnocultural division facilitate the differential welfare distribution of clientelistic linkage due to the factors of monitor and the separate group’s perception of fairness. I would like to point out that the relations between formal and informal institutions are two-way. Formal electoral institutions also play an important role in the party’s strategic choice, which is neglected by the authors. For instance, Japan’s clientelism is greatly influenced by its electoral rules. Before 1994, SNTV/MMD had led to intra-party competition and the candidates often sought to develop patron-client relations with specific organized groups, which had resulted in fractionalized party and weak party leadership. The welfare distribution before 1994 was thus fragmentary and clientelistic. After SMD was instituted in 1994, a candidate has to appeal to unorganized voters (the majority) in order to win the election. The importance of personal vote declines following the increasing electoral clout of the party leader. Under the current electoral rule, programmatic linkage is more likely to be adopted as the party strategy. This development is compatible with Cox and McCubbins’ theory of the legislative parties, according to which the candidates have shared interests regarding the party’s overall image.
I thought that the Kitschelt and Wilkinson piece was an important piece of theory building on a poorly understood topic. One feature that particularly interested me; the continued assumption of a 'progression' of political systems from a client/patronage basis to a policy platform basis. I would aver that political systems, even very developed ones, have heterogeneity along patronage-policy dimensions across various policy issues, public offices, segments of the population and electoral cycles. It is a mistake I think, to assume that clientilism does not co-exist with policy-motivated voters, or that patronage networks cannot develop themselves in more modern democracies even in the presence of policy-oriented publics, stringent anti-patronage social mores and institutions favourable to policy promises as opposed to patronage.
ReplyDeleteI think a lot of the heterogeneity in this sense can be explained by the type and value of the public good that masses forego when they engage in patronage behaviour. Lizzeri and Persico demonstrate using a formal model that electorally motivated politicans will endogenously provide public goods when the value of a public good is particularly high for the population, and will target private goods to segments of the population when the value of a public good is very low. Where public goods and private perks are of similar value to citizens, electoral incentives make a big difference in determining the efficiency of the outcome. It is possible that, given the weak states that seem to co-exist with clientilist networks, that politicians in patronage-based societies do not have any prospect of offering a high-value public good (e.g. law and order, contract enforcement, high-quality infrastructure, national social insurance), and so resort to patronage. As states develop economically, it may be that the public goods that enter a governments policy menu become sufficiently attractive as to motivate the diminuition of patronage systems. This is not to say that patronage may not continue in areas of society or public policy where the quality of public goods on offer is not as high. Such explanations could provide a channel between economic development and policy-oriented publics that is absent from Kitschelt and Wilkinson's discussion.
Lizzeri and Persico, 'The Provision of Public Goods Under Alternative Electoral Incentives', American Economic Review, 2000.
Leanne Tyler
ReplyDeleteComparing Institutions—Week 12: Parties and Informal Institutions
In “Citizen-Political Linkages,” Kitschelt and Wikinson identify three causal mechanisms that impact the nature of principal-agent relations between politicians and various sectors of the civilian population: competitiveness of democratic elections, political-economic governance structures, and ethno-cultural divides. The theoretical logic underpinning each of these causal mechanisms provides a unique opportunity to test the claims of the authors.
In reference to the first causal mechanism (competitiveness of democratic relations), Kitschelt and Wikinson hypothesize that a more competitive and inclusive political arena will significantly change the nature of patronage-based politics. According to the authors, maintaining patronage ties with individuals or small collectivities of citizens becomes more difficult with the influx of new actors. For example, in situations of increased voter participation, political leaders are put in the difficult position of having to monitor the compliance of a larger portion of the population. As a result, it simply becomes too costly to mobilize specific individuals and more expedient to mobilize nationally-based sectors of the population. Many states currently experiencing democratic transitions would provide an interesting test of the causal logic. For example, one could use the basic polity score as a guide for varying degrees of electoral competitiveness and compare that against patronage-based politics within the state. One would expect to see that with increased levels of competitiveness that individual-based mobilization would be replaced with sector-based (class or ethnic) mobilization. Another interesting relationship to examine with regards to this mechanism would the impact of specific regime types and the nature of patronage politics (one-party or multi-party authoritarianism).
The second causal mechanism (political economic governance structures) predicts that specific types of institutional structures will significantly impact patronage-based politics. For example, states with fairly large bureaucracies or public sectors may create an environment that is more conducive to clientelism than states that lack these types of governing structures. This argument forms an essential part of the justification for governance-reform offered by organizations such as the World Bank and the International Monetary Fund. This is a difficult causal mechanism to test because policies such as privatization which presumable “break” apart large states often result in the continuation of clientilist based ties. For example, in the late 1980s and early 1990s many Middle Eastern states were pressured by various international financial institutions to implement strict “privatization” as a means of combating pervasive “crony capitalism.” In the end, many politicians simply switched their ownership from public enterprises to private enterprises. Thus, the actors remained the same while the context was marginally modified. Still, policy reforms in the Middle East or Latin America (for instance) would provide an interesting opportunity to examine the manner in which clientilist-based relations change and preserver under different institutional settings. Changes in state governing structures (federal versus unitary) would also be another interesting causal mechanism to examine.
Lastly, the third causal mechanism ethno-cultural divides draws a connection between the demographic concentration of a group and clientelism. An interesting test of this mechanism would be secessionist movements that result in a clear divide between the “rump” state and the breakaway region. In the case of the breakaway region, minority groups become the new ruling majority and this can have interesting implications for the ways that groups mobilize their constituency base. Here, the provisions of private goods to one’s fellow ethnic group may carry less weight as the new constituency based is more homogenous than during the pre-secessionist period. Of course, countries such as Bosnia (with the implementation of federalist structure) or Serbia would be valuable cases to examine.