INTRODUCTION

How can ethnic favoritism coexist with ethnic neglect? We often observe scarce resources allocated politically along ethnic lines in the diverse societies of the developing world. In many cases, however, the mass constituents whose votes put their coethnics in office receive only meager rewards for their political support – raising the question of how favorable “ethnic favoritism” actually is for regular people. What can explain this dual dynamic? Why would people vote for coethnic leaders if they get little for their trouble? Why would they tolerate meager rewards rather than shop their votes around? How can elites get away with offering such payoffs?

The academic literature on ethnic politics focuses heavily on explaining ethnic favoritism and competition between communities. In contrast, it remains relatively silent about the distribution of resources within ethnic constituencies, whether in terms of how lucrative the payoffs are or how many people they reach. Commonly cited mechanisms that purport to explain the appeal of ethnic constituencies – whether due to shared tastes, information networks, or strategic selection – suffer from non-trivial conceptual holes and leave important questions unanswered. Moreover, these mechanisms offer no explanation for variation in reward size and quantity – why votes are cheap in some communities and dear in others.

This chapter develops a transactions-based theory of ethnic constituencies. It argues that ethnic links facilitate clientelism by reducing both uncertainty and transactions costs in exchange relationships. Efficient exchange, in turn, drives patrons and clients to prefer transaction partners within their own communities. Strategic selection of coethnics, however, segments the electorate and transforms these constituencies into protected vote markets for communal elites. Under such conditions, intraethnic competition between dueling patrons raises both the value of the vote and the quantity of votes demanded. In contrast, constituencies that unify behind a hegemonic patron trap their members in a vote monopsony that demands few votes and pays out meager rewards for them.

The rest of this chapter proceeds as follows. It begins by examining mechanisms that link politicians with their constituents in the market for votes. It highlights clientelism, examines barriers to patron–client exchange, and describes common tools such as machines and brokers that help to streamline transactions. Next, the chapter offers an information-based explanation for how ethnicity helps to reduce transaction costs in clientelistic exchange. It then argues that ethnicity induces imperfect competition in the vote market.