Public good provision under dictatorship and democracy

Abstract

The allocation of a government budget between a public good and transfers is modeled under different systems of government. The relatively even distribution of political power among groups in a democracy favors spending on nonexclusive public goods. The more concentrated pattern of political power in a dictatorship favors spending on transfers targeted to powerful groups. The hypothesis on public good provision is examined using cross-country data on public good provision and empirical indicators of political regime. Dictatorial governments are found to provide public schooling, roads, safe water, public sanitation, and pollution control at levels far below democracies.