All The Love That I Can Get: Discriminatory Service Provision Under Voice and Exit

Sammanfattning

Municipal governments routinely provide public services unevenly across demographic groups. While such patterns are often attributed to prejudice, they may also arise from the electoral incentives of office-motivated incumbents. Political bargaining can mediate the discriminatory distribution of a government budget. Following Kiss (2012), we build a game-theoretic model of municipal elections in a polity composed of two demographic groups of differing political preferences, and show how discriminatory provision can be sustained in an equilibrium of a simple retrospective voting game. We then extend our model to allow discriminated voters to exit, and show that the possibility of exit strengthens incumbent's incentives for discrimination.