The Hobbesian Bargain: State-Building, Fiscal Capacity, and Preferences for Redistribution in Fragile States

Abstract

What explains citizens' preferences for redistribution in fragile states? We examine fiscal capacity in the context of modern state-building in Afghanistan. As emergent governments struggle to supply their end of an Hobbesian bargain by establishing political order after state collapse, we argue that citizens' expectations of the government's policy direction are conditioned by newly-functioning political institutions. Absent a demonstrated record of fiscal capacity on the part of the state, these expectations importantly shape citizens' redistributive demands. We test our argument using nation-wide survey data from Afghanistan and an exogenous source of variation in individuals' political inclusion to proxy for perceptions of government policy direction. Results show that individuals who gain greater political inclusion through shared loyalties with elected politicians in the new regime demonstrate less support for redistribution, while those who perceive rent-seeking in government service delivery are more likely to spread the wealth around. Forms of quasi-voluntary compliance and risk aversion are two conditions that mediate preferences in favor of redistribution, conditional on a fragile state's demonstration of fiscal potential. Findings remain robust to numerous sensitivity analyses and alternative explanations. The analysis contributes to important theoretical and policy questions focused on the institutional components of state-building, fiscal institutions, and economic development.