Vote-buying and growth (Q2843371)

In this paper, the authors analyze the dynamics of a basic economic model (specifically, an overlapping generations model) that describes why developing countries are often caught in a poverty trap -- i.e., a steady state in which many (or all) of its citizens have minimal human capital. The authors then describe a vote-buying ``game'' intended to model a situation in which an agenda-setter offers subsidies to the poor to ``buy'' their votes, while the voters that would be taxed under this agenda attempt to directly bribe those same voters to prevent the proposal from being enacted. The authors show that vote-buyers can always ``win'' this game and thus prevent any attempts at wealth redistribution, keeping the nation in the poverty trap. The paper also suggests constitutional changes, most notably repeated voting on agendas, that are proven to allow a society to break out of the poverty trap in finite time.