For questions, please contact Professor Shankar Satyanath (email@example.com)
Contrary to the view that inequality reduces turnout, political participation among low income voters is higher in democracies with high levels of inequality and intermediate levels of state capacity. We address this puzzle by analyzing the link between political mobilization and spending decisions at different levels of inequality and state capacity. Under high inequality and low levels of capacity, parties find it optimal to mobilize low income voters via targeted goods. Yet, as capacity increases, targeted mobilization becomes less effective a strategy for voters’ mobilization. To evaluate the implications of this argument we exploit a quasi-natural experiment, the anti-corruption audits by the Brazilian federal government on its municipalities. We show that an exogenous increase in monitoring effort by the state breaks the existing equilibrium around high electoral participation of the poor and leads to a reduction in turnout rates, a reduction in the provision of targeted goods at the local level, and a decline in the likelihood of re-election by incumbents.