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Countries vary systematically with respect to the incentives of politicians to provide broad public goods and to reduce poverty. Even in developing countries that are democracies, politicians often have incentives to divert resources to political rents and to private transfers that benefit a few citizens at the expense of many. These distortions can be traced to imperfections in political markets that are greater in some countries than in others. Keefer and Khemani review the theory and evidence on the impact of incomplete information of voters, the lack of credibility of political promises, and social polarization on political incentives. They argue that the effects of these imperfections are large but that their implications are insufficiently integrated into the design of policy reforms aimed at improving the provision of public goods and reducing poverty.This paper - a joint product of the Investment Climate and Public Services Teams, Development Research Group - was originally prepared as a background study for World Development Report 2004: Making Services Work for Poor People.
Countries vary systematically with respect to the incentives of politicians to provide broad public goods, and to reduce poverty. Even in developing countries that are democracies, politicians often have incentives to divert resources to political rents, and to private transfers that benefit a few citizens at the expense of many. These distortions can be traced to imperfections in political markets, that are greater in some countries than in others. The authors review the theory, and evidence on the impact of incomplete information of voters, the lack of credibility of political promises, and social polarization on political incentives. They argue that the effects of these imperfections are large, but that their implications are insufficiently integrated into the design of policy reforms aimed at improving the provision of public goods, and reducing poverty.
For too long a conventional wisdom has held sway, suggesting that poor people in poor countries are not supportive of democracy and that democracies will be sustained only after a certain average level of wealth has been achieved. Evidence from 24 diverse countries of Asia, Africa and Latin America examined in this volume shows how poor people do not value democracy any less than their richer counterparts. Their faith in democracy is as high as that of other citizens, and they participate in democratic activities as much as their richer counterparts. Democracy is not likely to be unstable or unwelcome simply because poverty is widespread. Political attitudes and participation levels are unaffected by relative wealth. Education, rather than income or wealth, makes for more committed and engaged democratic citizens. Investments in education will make a critical difference for stabilizing and strengthening democracy.
The book offers a critical assessment of the state of current knowledge on the distributional impacts of public spending for developing and transition countries. It focuses on the distribution of benefits from spending categories that have traditionally been seen as pro-poor, including education and health expenditures, food subsidies, cash transfers, and public employment schemes.
Publisher Description
The Political Logic of Poverty Relief places electoral politics and institutional design at the core of poverty alleviation. The authors develop a theory with applications to Mexico about how elections shape social programs aimed at aiding the poor. They also assess whether voters reward politicians for targeted poverty alleviation programs.
"This publication is an output of Ad Hoc Expert Group Meeting on Civil Participation in Fiscal Policy, held in March 2004 in New York Headquarters"--Pref.
Public expenditure policy, together with efforts to raise revenue,is at the core of efficient and equitable adjustment. Public expenditureproductivity has critical implications for fiscal adjustment, particularly as the competition for limited public resources intensifies.By providing a framework for defining and analyzing public expenditureproductivity and unproductive expenditures, this pamphlet discusseshow economic policymakers may approach these issues.
In recent decades, and particularly since the US Supreme Court’s controversial Citizens United decision, lawmakers and other elites have told Americans that stricter campaign finance laws are needed to improve faith in the elections process, increase trust in the government, and counter cynicism toward politics. But as David M. Primo and Jeffrey D. Milyo argue, politicians and the public alike should reconsider the conventional wisdom in light of surprising and comprehensive empirical evidence to the contrary. Primo and Milyo probe original survey data to determine Americans’ sentiments on the role of money in politics, what drives these sentiments, and why they matter. What Primo and Milyo find is that while many individuals support the idea of reform, they are also skeptical that reform would successfully limit corruption, which Americans believe stains almost every fiber of the political system. Moreover, support for campaign finance restrictions is deeply divided along party lines, reflecting the polarization of our times. Ultimately, Primo and Milyo contend, American attitudes toward money in politics reflect larger fears about the health of American democracy, fears that will not be allayed by campaign finance reform.