the climate to produce sugar led to variation across countries within the Americas in the timing of adoption of egalitarian political institutions (democracy with universal adult suffrage) and social policies (education for universal literacy). Similarly, Acemoglu and Robinson (2012) argue that early experience with inclusive or egalitarian political institutions in the history of nations is the source of variation in subsequent paths of economic development.

However, although this body of work shows that early adoption of egalitarian institutions and social policies is important, the mechanisms behind why early adoption matters and has persistent effects is not clarified or made explicit. Why are countries not able to change outcomes within short time spans by instituting elections with universal adult suffrage and spending on public education? The answer in this paper, echoing the arguments in World Bank (2016) are that first, political preferences regarding what policies to support on the demand side, and how to vote on the supply side, are important in shaping the functioning of formal institutions. Historical institutions of inequality can contribute to unhealthy political preferences such as those that sustain clientelist forms of political competition where political support is won on the basis of providing targeted private benefits rather than broad public goods.

Brixi, Lust, and Woolcock (2015) provide a study of government failures in the Middle East and North Africa region with a similar argument and interpretation of available evidence. They discuss how historical experience with colonial institutions, and beliefs about the role of the state at the time of independence in the region, led to political clientelism, elite capture of state resources, and citizen expectations that leaders would provide a broad range of private and public benefits (such as subsidies, health, and education). The coexistence of these three factors—that leaders organized to extract private rents from the economy, maintaining loyalty and political support through patronage, providing subsidies and a broad range of public services to citizens to win their acquiescence—became untenable as economic inefficiencies mounted and citizens became dissatisfied with the social compact. Yet, as the evolving dynamics in the region suggest, leaders may be able to use the coercive institutions of the state to maintain elite capture despite a large number of citizens being unwilling to support it. This is another case where the technology of political power takes precedence over the argument that political institutions are endogenous to preferences; although elite preferences can still explain why those coercive and suppressive technologies are adopted.

Measuring citizen demand for policies that provide private benefits rather than broad public goods is an empirical challenge. Existing work has typically made indirect inferences on the basis of changes in vote shares for different political parties and candidates. Casey (2015), for example, provides evidence that information reduces vote shares of co-ethnic candidates in Sierra Leone, which may lead one to infer that this implies a reduction in identity-based patronage and expansion of programmatic goods; but, in fact, she cannot rule out that the information may have led to greater vote buying or targeted provision of private benefits. Vote shares could shift because political candidates respond to availability of information by increasing efforts at targeting those voters from whom support can be bought in exchange for private benefits. Indeed, Cruz, Keefer and Labonne (2015) find an increase in vote buying by political candidates in the Philippines when their constituents are exposed to more information.

Recent use of survey vignettes constitutes an important innovation in assessing citizens’ demand for policies that confer private benefits at the expense of broad public goods. Typical surveys of respondent policy preferences do not ask respondents to internalize tradeoffs between these two objectives. Instead, 32