The political economy of distribution in developing countries: A rent-seeking approach

Economic development in many Third World countries after independence has been biased in the sense that some, mainly urban, social groups have gained much more than the majority of the population who lives in rural areas or urban shantytowns. That bias is to a large extent caused by government policy and, accordingly, by an uneven distribution of political influence. This paper contains an analytical model reflecting the bias in the distribution of the benefits and costs of public sector activities, where those activities are determined by the distribution of political influence. The main elements of the distribution of political influence are determined in a rent-seeking game between society's different social groups.