Patronized agents: workfare and clientilism in Hungary

Clientelism, the exchange of private goods and services for political support is endemic in both developing countries and some developed countries as well. While the social impact of clientelism is well understood, the conditions favouring its emergence are less clear. Balázs Reizer is an associate professor at Department of Economic Policy and Labor Economics and senior research fellow at Centre for Economic and Regional Studies. Together with co-authors in a recent working paper they build a model which investigates the conditions under which clientelism can arise between the central government, independent mayors, and voters. The authors test the model predictions on the Hungarian example, using data from a large workfare program. They show that (i) workfare allocation across settlements is consistent with political interests of the ruling party (Fidesz), (ii) the workfare program brings votes for Fidesz nationally and for the mayors locally, (iii) spatial regression discontinuity evidence shows that this extra support is realized through clientelism (the threat of losing public work), rather than the popularity of the program.