Spending to win: political institutions, economic geography, and government subsidies

"Democratic institutions ostensibly serve the common good. Yet democratically elected leaders face varied incentives. Politicians must balance the public's welfare with demands from interest groups that run counter to the common good. Nowhere is this balancing act more apparent than in the area of economic policy. Many economic policies redistribute resources between groups. Governments collect taxes and redistribute the money via government programs. Governments could spend money on programs that support broad groups, such as universal health care or education. Alternatively, governments could use their fiscal resources to privilege small, select groups of citizens via programs like subsidies for business. Subsidies typically provide economic benefits selectively to small groups and accordingly can be described as "particularistic" economic policies. Particularistic economic policies often come at a cost to larger groups, including tax payers and consumers. Yet despite these characteristics, particularistic economic policies emerge in democratic contexts"--

Governments in some democracies target economic policies, like industrial subsidies, to small groups at the expense of many. Why do some governments redistribute more narrowly than others? Their willingness to selectively target economic benefits, like subsidies to businesses, depends on the way politicians are elected and the geographic distribution of economic activities. Based on interviews with government ministers and bureaucrats, as well as parliamentary records, industry publications, local media coverage, and new quantitative data, Spending to Win: Political Institutions, Economic Geography, and Government Subsidies demonstrates that government policy-making can be explained by the combination of electoral institutions and economic geography. Specifically, it shows how institutions interact with economic geography to influence countries' economic policies and international economic relations. Identical institutions have wide-ranging effects depending on the context in which they operate. No single institution is a panacea for issues, such as income inequality, international economic conflict, or minority representation.

Governments in some democracies target economic policies, like industrial subsidies, to small groups at the expense of many. Why do some governments redistribute more narrowly than others? Their willingness to selectively target economic benefits, like subsidies to businesses, depends on the way politicians are elected and the geographic distribution of economic activities. Based on interviews with government ministers and bureaucrats, as well as parliamentary records, industry publications, local media coverage, and new quantitative data, Spending to Win: Political Institutions, Economic Geography, and Government Subsidies demonstrates that government policy-making can be explained by the combination of electoral institutions and economic geography. Specifically, it shows how institutions interact with economic geography to influence countries' economic policies and international economic relations. Identical institutions have wide-ranging effects depending on the context in which they operate. No single institution is a panacea for issues, such as income inequality, international economic conflict, or minority representation