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April 18, 2005

James Robinson: "Land and Power: Theory and Evidence from Chile"

James Robinson, who we lost to Harvard last year, comes to the Economic History Seminar on his brief tour of Berkeley:

Jean-Marie Baland and James Robinson (2005), "Land and Power: Theory and Evidence from Chile" (Cambridge: Harvard): With the introduction of the secret "Australian" ballot in Chile in 1958, land prices fall sharply. Baland and Robinson interpret this as evidence that landlords were 'buying' the votes of their inquilinos at less than the market price of votes. Inquilinos, you see, are relatively well-off in the context of the Chilean countryside: they value their place in the hacienda and know how much better off they are then the casual laborers without attachment to the hacienda. With the introduction of the secret ballot, landlords still have to provide their inquilinos with the same "efficiency wage" premium over casual labor in order to elicit high work effort, but they no longer get to control who their inquilinos vote for. To the extent that a big part of the value of being a landlord is the status and power within right-wing politics that you get by being a large landlord who can deliver the votes of many inquilinos, you would expect to see land prices fall (and the right-wing rural vote share drop) significantly with the introduction of the secret ballot.

George Akerlof and I attacked Jim's position. We thought it was likely that becoming a landlord gained you status within the right-wing parties not because you were (crassly) viewed as a source of votes but because everyone working in the right-wing party secretariats in Santiago had bought into a landlordist ideology. We thought that the right-wing commitment to this ideology was indirectly supported and generated by landlords' ability to deliver agricultural dependents' votes, but was not directly linked to it. And we thought that the inquilinos had, to some degree at least, likely bought into the paternalist landloard ideology as well. We expected Baland and Robinson to find not a big impact effect of the introduction of the secret ballot, but a slow decline over years or decades.

George and I were wrong. It's not a Gramscian process at all. Jim Robinson, tenured political scientist, with his crass reductionist view of the market-for-votes as a process of market-like exchange, beats George Akerlof and Brad DeLong, tenured economists, with their more Gramscian view that a process of ideological consciousness formation intervenes between the material base of land tenure and the superstructure of political behavior.

The irony is entertaining...

Abstract: In this paper we investigate the effect of the absence of a secret ballot on electoral outcomes and resource allocation. When voting behavior is observable, votes can be bought and sold in a 'market for votes'. We distinguish between direct vote buying, where individuals sell their own votes to political parties, and indirect vote buying, where people also sell the votes of others; and we characterize the circumstances in which vote buying changes the electoral outcome. we then provide a microfoundation for indirect vote buying, which usually takes the form of employers sellign the votes of their employees. This can occur when the employment relationship involves [labor] rents, since employers can use the threat of withdrawal of these rents to control the political behavior of their dependents. This [effect] increases the demand for labor and generates an added incentive to own land increasing the price of land. We test the predictions of this model by examining in detail the effects of the introduction of the secret ballot in Chile in 1958. We show that this chagne in political insitutions had implications for voting behavior and land prices which are consistent with the predictions of our model.

"It is a cruel mockery to tell a man he may vote for A or B, when you know that he is so much under the influence of A... that his voting for B would be attended with... destruction.... It is not he who has the vote... but the landlord, for it is for his benefit and interest that it is exercised in the present system." --David Ricardo (1824)

"When any man attempted to estimate the probable result of a county election in England, it was ascertained by calculating the number of the great landed proprietors in the county and weighing the number of occupiers under them." -- Lord Stanley (1841)

"If that law [without the secret ballot] did not exist, instead of there being 9 Socialist senators there would be 18, and you would be reduced to 2 or 3.... [Y]ou laugh, but the truth is that there would be not 2 Conservative senators from O'Higgins and Colchagua, which corresponds exactly to the number of inquilinos in the fundos which belong to the Conservative hacendados in that region. Conservaties would have only one or perhaps none." -- Senator Martone (1958)

Posted by DeLong at April 18, 2005 03:23 PM