Bribing votes: A new explanation to the "inequality-redistribution" puzzle in LDC's

Abstract

The recent empirical literature on redistribution and development emphasizes two main evidences: (i) more redistribution generally induces higher growth rates and (ii) more inequality does not necessarily increase the political demand for redistribution. These stylized facts are at odds with the correlations observed in developed countries. Several theoretical arguments can be advanced to explain these puzzles. In this paper, it is shown that "vote purchases" may be seen as an additional argument to explain puzzle (ii). We formalize this idea and examine the conditions under which vote bribes may be an obstacle to redistribution (and thus to growth) in a developing economy.