Bad Bargains? Does Vote-Buying Hinder Progressive Social Policy in Latin America?

Welfare states in low- and middle-income democracies are haunted in many ways: they suffer from resource scarcity, economic volatility, and institutional inefficiencies. But apart from these structural weaknesses, social policies are first of all a product of political decision-making processes that take dominant interests into account. So far, Latin American welfare systems are marked by a high degree of regressivity; lower income groups pay disproportionally higher transfers while benefits are redistributed to the already better-off. At the same time, Latin America still represents the region with the most inegalitarian income distribution. In this paper we therefore ask why regressive social policies are so persistent given the large group of low-income individuals who should have very clear-cut incentives to opt for greater redistribution. Why are the interests of low-income voters much less represented in Latin American social policies? We argue that it is the clientelistic practices of political parties that distort the link between the interest of low-income individuals and the outcome of redistributive policies. Vote-buying is more strongly targeted towards lower income groups as their votes come at a lower cost. By paying off the poor in return for their vote, political parties gain greater leverage to pursue their political agenda so that regressive social policies can be passed in the legislature. We use expert survey data to measure the level of vote-buying for political parties in 18 Latin American states and different macro-level proxies for regressive welfare provision such as the pension coverage rate. We scrutinize the nexus between clientelism and the truncated Latin American welfare states to examine if low-income individuals make a ‘bad bargaining’ by selling their vote regarding the long-term social policy implications.