Elite Networks: The Political Economy of Inequality by Vuk Vuković

Author:Vuk Vuković [Vuković, Vuk]
Language: eng
Format: epub
Tags: Social Science, Social Classes & Economic Disparity, Political Science, Political Economy, Business & Economics, Economic History, Discrimination
ISBN: 9780197774250
Google: o9wFEQAAQBAJ
Publisher: Oxford University Press
Published: 2024-04-23T05:23:56.661273+00:00

6

Motivation for Politicians

Extracting Rents and Staying in Power

Ninety percent of the politicians give the other ten percent a bad reputation.

—Henry Kissinger

Now that we understand why people enter into elite networks, we can examine the benefits of membership for each group. We start with politicians. What benefits can politicians achieve by entering into such relationships? In high- corruption countries two benefits stand out in particular: (1) avoiding punishment if they are able to generate a minimum winning coalition of interests, which is very often consolidated by the elite network they belong to; and (2) the ability to extract rents for themselves, in the form of various monetary or nonmonetary concessions. In low-corruption countries, the risk of taking bribes or otherwise embezzling public money is too high, so politicians receive other types of rewards. They get appointed to corporate boards after leaving office, enjoy small favors while in office, or, in cases of low accountability and oversight, can engage in extortion and similar practices, and may still build powerful local coalitions to remain in power.

The political agency literature, in addition to the selectorate theory, provides the best explanations of how this mechanism works, showing that office longevity and rent-extraction need not be mutually exclusive. When this is the case, a politician can stay in office for long periods of time, supported by an elite network they’ve helped set up, contingent on all of them receiving their share of the rent.

A more direct approach to estimating rent-extraction in the form of corruption is also possible. A number of empirical research efforts have been made, across several countries, that aim to approximate corruption using fraudulent procurement contracts. When measured this way, corruption is shown to have a direct positive implication on political re-election. This is worrisome, but as this chapter will show, it is not entirely surprising.

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