Liberalisation, democratisation and the distribution of urban local public goods

Abstract

An important issue in the study of economic development is that it examines how participatory democracy influences the efficiency and the equity associated with the utilisation of economic resources. The main research agenda in this context pivots on the question of whether and to what extent democratisation helps to allocate economic resources by serving the interests of the majority of voters. It is widely recognised that democratisation can promote the welfare of the majority by enhancing flows of information between citizens and policy makers and by increasing the accountability of policy makers to citizen voters. On the other hand, it has been widely held that democratisation can adversely affect the welfare of the majority by triggering and increasing unproductive rent-seeking activities in a democracy. Early empirical evidence on the welfare effects of democracy and democratisation have been primarily at the cross-national level and have focused on GNP growth as the outcome of interest (Barro, 1996; Minier, 1998). The results have been ambiguous, and riddled with a myriad of problems with regard to interpretation of national-level data. It also offered little explanation of the mechanisms by which democratisation affects the policy choices that, in turn, impinge on economic performance. It is also widely believed that the capture of public policies by interest groups can thwart the efficacy and the equity of the allocation of resources.

Citation

Gangopadhyay, P. (2008), "Liberalisation, democratisation and the distribution of urban local public goods", Chatterji, M. and Jain, B.M. (Ed.) Conflict and Peace in South Asia (Contributions to Conflict Management, Peace Economics and Development, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 57-72. https://doi.org/10.1016/S1572-8323(08)05005-4