Local Inequality and Project Choice: Theory and Evidence from Ecuador
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World Bank, Washington, DC
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This paper provides evidence consistent with elite capture of Social Fund investment projects in Ecuador. Exploiting a unique combination of data-sets on village-level income distributions, Social Fund project administration, and province level electoral results, the authors test a simple model of project choice when local political power is unequally distributed. In accordance with the predictions of the model, poorer villages are more likely to receive projects that provide excludable (private) goods to the poor, such as latrines. Controlling for poverty, more unequal communities are less likely to receive such projects. Consistent with the hypothesis of elite capture, these results are sensitive to the specific measure of inequality used in the empirical analysis, and are strongest for expenditure shares at the top of the distribution.
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ACCESS TO SERVICES, AGRICULTURE, ANTI-POVERTY, BASIC INFRASTRUCTURE, BENEFICIARIES, BENEFICIARY ASSESSMENTS, CIVIL SOCIETY ORGANIZATIONS, COMMUNITY GROUPS, COMMUNITY ORGANIZATIONS, COMMUNITY PARTICIPATION, CORRUPTION, DECENTRALIZATION, DEMAND-DRIVEN APPROACH, DEMOCRACY, DEVELOPING COUNTRIES, DEVELOPMENT ASSISTANCE, ECONOMETRIC ANALYSIS, ECONOMIC STATUS, EQUILIBRIUM, ESTIMATES OF POVERTY, FOOD FOR EDUCATION, GEOGRAPHIC TARGETING, GLOBAL DEVELOPMENT, HIGHER INEQUALITY, HOUSEHOLD CONSUMPTION, HOUSEHOLD LEVEL, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, INCIDENCE OF POVERTY, INCOME, INCOME DISTRIBUTION, INCOME INEQUALITY, INCOME LEVELS, INCOME TRANSFERS, INDICATOR OF POVERTY, INEQUALITY, INFORMATION SYSTEM, IRRIGATION, LAND INEQUALITY, LARGE POPULATIONS, LOCAL COMMUNITIES, LOCAL GOVERNMENTS, LORENZ CURVE, MACROECONOMIC ADJUSTMENT, NATIONAL LEVEL, NGO, NUMBER OF HOUSEHOLDS, NUTRITION, PARTICIPATORY, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POLITICAL POWER, POLITICAL PROCESS, POLITICAL SUPPORT, POOR, POOR AGENTS, POOR COMMUNITIES, POOR HOUSEHOLDS, POOR INDIVIDUALS, POOR PEOPLE, POPULATION CENSUS, POVERTY INCIDENCE, POVERTY LINE, POVERTY MAP, POVERTY PROGRAMS, POVERTY REDUCTION, PRODUCTION FUNCTION, PROGRESS, PROJECT MONITORING, PUBLIC GOOD, PUBLIC SPENDING, RESOURCE ALLOCATION, RESPECT, RICHER PEOPLE, RURAL, RURAL ECONOMY, RURAL POVERTY, RURAL POVERTY RATES, RURAL SECTOR, SANITATION, SCHOOL BUILDINGS, SOCIAL FUND PROJECTS, SOCIAL FUNDS, SOCIAL INFRASTRUCTURE, SOCIAL SERVICES, SOCIAL WELFARE, SPATIAL DISTRIBUTION, STRUCTURAL ADJUSTMENT, STRUCTURAL ADJUSTMENT PROGRAMS, TARGETING, URBAN AREAS, UTILITY FUNCTION, VALUATION, VOTERS, WEALTH