What is clientelism and why we should care about it

In my first post, I would like to share with you part of my work as a scholar of politics.

I study clientelism, which is, in my view, a fundamental but understudied and highly underrated phenomenon in politics. In my book, Clientelism and Economic Policy: Greece and the Crisis (2016), I define clientelism as ‘the distribution of resources by political power through an agreement in which politicians – the patrons – make this allocation dependent on the political support of the beneficiaries – their clients’ (page 12). Clientelism emerges at the intersection of political power with social and economic activity.

Why is this phenomenon important? As Harold Laswell put it, politics is the art and science of ‘who gets what’ in society (1936). This famous phrase epitomizes the nature of politics as a competitive process for power and resources. Because these resources are often excludable and rivalrous, multiple social actors and groups are expected to compete with one another for access to political power and the resources it distributes. In addition, as political power decides how scarce resources are to be allocated, there is competition among political actors who wish to gain power and take control of the distribution mechanism. Either way, participation in political competition is costly and occurs in anticipation of higher benefits for each of the participants. Clientelist exchange occurs when political actors competing to gain political power interact with socioeconomic actors striving to persuade political power to meet their demands and claims.

A ‘political market’ for the allocation of economic resources emerges and has distinct characteristics. On the one hand, it generates informal ‘prices’, for the goods and services provided by the government: there is demand by economic actors for preferential treatment and there is supply by political agents of resources, opportunities and benefits. On the other hand, the terms under which clientelist exchange takes place differ substantially from ordinary market transactions, primarily in terms of bargaining power, the enforcement mechanism, externalities, and selection process.

Power asymmetry characterizes the relations between patrons and clients. Clientelism works as an oligopoly. Few patrons occupy the supply side while myriads of candidate clients inhabit the demand side. Depending on what resources each side trades or possesses for future trade, as well as how long one has been – or expects to be – in a position to trade, power asymmetry can tilt in favor of the patron or the client, as in the case of big donors.

Another distinctive element of clientelism is the fact that, while clientelist exchanges is not legally binding or enforceable before courts, honoring the agreement depends on expectations of reciprocation from each party and, quite often, on fears and threats of retaliation in case one party fails to meet the terms of the agreement. On the part of the political agents involved in clientelist exchange, it is a matter of building trust and reputation over time, which, in the absence of formal sanctions, reduces the perceived risk of breaking the terms of the agreement.

In economic theory, clientelism is linked to the concept of rent seeking. Clientelist exchange is actually a subset of rent seeking. It involves explicit agreements according to which the beneficiary must reciprocate by supporting the agent in the political and administrative authority who has offered them the opportunity to extract a rent.

The conventional approach in economics is to view rent seeking as a distortion of market competition for the externalities it imposes on all other non-participating actors. In the real political economy approach, almost all political decisions distribute benefits and costs. My work focuses on the political implications of clientelism.

The process by which the government distributes clientelist benefits inevitably requires some sort of selection of who would be the beneficiary among a pool of prospective clients. Politicians whose political survival and success depend on getting elected to office have a strong incentive to distribute resources to those who would offer them the most valuable form of political support; not just a single vote, but campaign funding, loyal party membership, activist support or favorable media coverage (Trantidis 2016, 18)

The concept of clientelism is mistakenly reduced to a form of vote-buying. This is a narrow view of a much broader phenomenon. Indeed, clientelism serves politicians as a way to strengthen their chances to win elections but resources for clientelist distribution are scarce and the best way to use these resources is to attract those who could made a campaign contribution. It is difficult to monitor voters’ behavior and it is definitely not economical to use resources indiscriminately to buy individual votes, particularly in advanced economies where voters may be too costly to buy and many may simply refuse to be bought off.

Instead, clientelism works as an indirect way of gaining votes (Trantidis 2016, 19). By allocating benefits strategically to attract the biggest possible campaign contributors, politicians can gain an advantage in campaign resources that would allow them to make a stronger appeal to general voters. In short, clientelism is a strategy for political organization and campaign recruitment that has an indirect effect on voters’ behavior. Resource endowments define the capacity of each party to perform a number of tasks necessary for political survival and growth.

As I explain in the introduction of my 2016 book, the first and typical ‘image’ of clientelism is that of an individual agreement. The second ‘image’ of clientelism is that of a strategy for collective mobilization. Politicians create networks of clients that help them organize a campaign infrastructure with a strong support network.

The second image of clientelism refers to the formation of groups of loyal supporters on a more permanent basis. Clientelism is a way by which politicians and political organizations overcome the famous problem of collective action (Olson, 1965). Collective action does not occur automatically from groups having common concerns or a perception of shared interest. This holds especially if the perceived collective benefit is to be indiscriminately shared by multiple actors in large groups. In that case, there are weak incentives for someone to actively contribute to the collective effort. This logic of collective action applies to political organization too. Political parties need active supporters and campaign resources to be able to compete for votes and, for that purpose, they have to find a way to overcome a free-riding problem. For party leaders, the organization of a coherent and active party basis can be achieved through the distribution of targeted benefits to party members and supporters entering a clientelist network. While it is costly to mobilize political support, available state resources allow political actors to pass this cost on society. In forthcoming posts, I will discuss how this phenomenon could affect the design of public policies.

For the time being, let’s summarize the three key characteristics of clientelism:

  1. Clientelism is a common form of distribution of resources by political power. It stems from the intersection of two competitive processes: a ‘market’ for political support and a ‘market’ for rents and other government granted privileges.
  2. Clientelism is more than vote buying. The practice gives preference to those who can make the highest valued contribution to a politicians’ campaign infrastructure and support network: donors, activists, prominent figures, journalists.
  3. Clientelism generates support networks. It is a way for political agents and organizations to overcome a collective action problem regarding how to mobilize, control and discipline active groups of supporters. This is a valued strategy for political organization that can hardly be eradicated from the political process.

Clientelism is a common, expected and inevitable practice in politics. In the next blogs, I will talk about how this practice should make us reconsider the notions of political participation and representation, rethink how public policies are formulated and reconceptualize democracy as a competitive arena in which authoritarian and democratic governments work to become dominant political forces. Thank you for your attention.

References

Laswell, Harold. 1936. Politics: Who Gets What, When, How. New York: Whittlesey House.

Olson, Mancur. 1965. The Logic of Collective Action: Public Goods and the Theory of Groups. Cambridge MA: Harvard University Press.

Trantidis, Aris. 2016. Clientelism and Economic Policy: Greece and the Crisis: London and New York: Routledge.

Ferguson: the Problem is Collectivism

We Austrians emphasize the fact that only individuals act.  This may sound like a dry academic pronouncement, but sometimes events bring its meaning dramatically to the fore.  The Ferguson story is one such event.

While lunching in Palo Alto recently, I looked outside to see the street briefly blocked by demonstrators chanting and carrying signs with slogans like “black lives matter.”  I wished I could confront one of them with a few facts, but then again, facts matter little to such folk, even in trendy Palo Alto.

The racially mixed grand jury took seventy hours of testimony.  That’s a lot.  They know what happened better than you or I or anyone besides the officer involved.  The shooting was justifiable.  Another fact that seems to have gotten buried: Michael Brown was a criminal, just having completed a robbery when he was shot.  It’s too bad that he died, but hey, criminal activity is risky.

In light of these simple facts, how can people propound such irrationality as the demonstrators exhibited?  The answer lies in the fallacy of collective guilt, a sub-species of collective action.  Because white police officers sometimes shoot innocent black citizens, the fallacy implies that any white police officer who shoots a black civilian is necessarily guilty.

Now I want to extend this piece to the idea of reparations for slavery, a grotesque bit of nonsense that pops up from time to time, most recently, sad to say, in a piece by our own Brandon Christensen, albeit in passing.

Let me get this out of the way: slavery was a vicious, horrible institution.  The idea of reparations or restitution has some rationality on the face of it.  In general, people should be compensated, where possible, for violations of their rights, and what could be a more vicious form of rights violation than slavery?

From an individualist point of view, the idea of reparations is preposterous.  I for one know pretty well who my ancestors were, and I’m quite sure none of them held slaves.  But suppose I did have such an ancestor.  The next question is how much benefit I might have received from his slaveholding.  To answer that, we have to examine the counterfactual situation in which my ancestor did not hold slaves.  How much bigger was the bequest that he passed on (if any) versus what it would have been without slaves?  How much of that bequest filtered down to me, among possibly dozens of his descendents.  Clearly this is a preposterous undertaking, especially at this late date.

Well then, why not force all white people to pay something to all black people?  This of course is the idea of collective guilt, an idea nearly as repulsive as slavery itself.  But let’s carry on with it anyway.  Now we have to decide who is a white person and who is black.  Does Barack Obama count, being half white and half black?  Is one quarter black enough?  One eighth?

Carrying on, where will the loot come from?  White people will have to reduce their consumption and/or savings.This will exacerbate unemployment, at least temporarily, and reduce future productivity.  What would black people do with the money?  Some would judiciously save and invest it but most would not.  I say this because studies have shown that the majority of the winners of large lottery prizes blow the money, unaccustomed as most of them are to saving and investing.  Most blacks, I contend, would blow their reparations windfall on short-term consumption and possibly, like many lottery winners, end up in debt to boot.

Let’s keep things in perspective.  Racism is a minor problem in our society compared to the crushing burden of the welfare-warfare state that we all bear.