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PE/PI Workshop: Pablo Beramendi (Duke)

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Wednesday, January 25, 2023
12:00 pm - 1:15 pm

Pablo Beramendi (Duke) will present his talk, "Capacity, Enfranchisement and the Distributive Consequences of Commodity Booms," (with Melissa Rogers and Victoria Paniagua).

Agricultural commodity booms are revenue windfalls that provide resource-rich nations the opportunity to improve their fiscal capacity and their nations' distributive strategies. Yet only a subset of nations appear able to employ those resources to increase tax revenue, shrink inequalities, and retract sectoral subsidies. We provide a theory to explain nations' current distributive strategies by the sequencing of investment in state capacity and the expansion of popular suffrage. In early capacity developers, investments in the administrative and fiscal engines of the state reflected elite preferences for public goods to expand economic development. When suffrage arrived, state capacity was already committed to those goals. Late capacity developers built state capacity at a time when the masses already held sway via the ballot box. Elites were unlikely to cede significant control to develop capacity that would come from their pockets, yet not reflect their priorities. We focus on resource mobilization from commodity booms as indicative of long-run state capacity and government priorities in the current times. Those states that developed state capacity prior to popular suffrage are able to mobilize resources from commodity booms to expand the fiscal state, compensate losers from boom, all the while reducing inequality at the top. States that developed capacity after suffrage change little in the short term, and appear worse off in the long term after the boom.

Contact: Cameron Tilley