The Political Economy of Governance Quality

Abstract

This paper develops a dynamic theory of the social and political foundations of governance quality. In the model, groups of citizens have different expected needs for a public service, and citizens choose whether to demand service when the need arises. Politicians representing these groups can determine policy benefits and delegate to bureaucrats the ability to invest in long-run service quality. The main feature of the theory is its foundation for citizen–government interactions, which draws from well-known queueing models of organizational service provision. The model provides a framework for characterizing the effectiveness and durability of government programs. A main implication is that politicized bureaucracies improve program survivability and increase the frequency of investment, while insulated bureaucracies increase the intensity of investment; overall service quality trades off between these two factors. Other results examine the implications of cross-group inequality, electoral conditions, and decentralization.