Vote-Buying and Growth

Abstract

Vote-buying is widely used by parties in developing countries to influence the outcome of elections. We examine the impact of vote-buying on growth. We consider a model with a poverty trap where redistribution can promote growth. We show that vote-buying contributes to the persistence of poverty as taxed wealthy people buy votes from poor people. We then show that there exists a democratic constitution that breaks vote buying and promotes growth. Such a constitution involves rotating agenda setting, a taxpayer-protection rule and repeated voting. The latter rule makes vote buying prohibitively costly.

Keywords: vote-buying, political economy, poverty traps, economic development, voting rules, repeated voting

JEL Classification: D72, I20, I30, O10, P16