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Most of the poor in the developing world work in the informal economy, that is, in occupations that take place outside of the legal system of taxing, spending, and regulating. This article examines how informal work impacts the policy and electoral preferences of the poor. We emphasize the importance of the risks inherent in informal employment in shaping the responsiveness of citizens to clientelism and their policy and voting preferences. Since most informal workers are not covered by (formal) social insurance, they prefer material goods and candidates that produce targeted, clientelistic benefits rather than programmatically delivered insurance that is unlikely to reach them. As a result, we argue that informal workers are more likely to rely on clientelistic relations as a means of hedging risks than are formal workers; prefer policies that are delivered clientelistically via political mediators rather than programmatic solutions; and prefer clientelistic over programmatic local candidates. Our findings elucidate why the preferences of poor informal workers often diverge from those assumed by standard models of social insurance and have important implications for the political economy of social policy in a world where billions work outside work-based tax-transfer systems. [ABSTRACT FROM AUTHOR]

Developing countries vary dramatically in the amount they spend on social insurance. We establish a theoretical framework linking autarkic post-World War II economic development strategies with the emergence of insurance-based social policies. We argue that a government's choice of development strategy is conditioned by the size of the domestic market, relative abundance of labor, and land inequality in the context of a closed international trading system. The development strategy in turn shapes the fiscal priority governments place on social insurance. Contrary to the compensation hypothesis prominent in studies of the rich democracies, protectionist countries emphasize social insurance. Empirical analysis finds support for our argument. The results suggest that economic policies in the 1950s, 1960s, and 1970s had important implications for the emergence and current contours of social policy in the developing world. These differences in priorities swamp recent within-country changes. [ABSTRACT FROM AUTHOR]

This note underscores the need for more precise causal theories linking the international division of labor, national economies, and public policies. To that end, the author recommends two literatures upon which a revised dependency theory might build, namely, those on economic geography and the political economy of redistribution. [ABSTRACT FROM AUTHOR]

Prior research on the politics of market reform in developing nations has generally ignored the significant role of federal political and economic arrangements in shaping adjustment processes. In contrast, this research develops a model of macroeco-nomic reform that accounts for the significance of subnational economic policy in the developing world's nine major federations. I examine five hypotheses which are expected to influence the capacity of developing federations to conduct policy consistent with the exigencies of market pressures. With the use of a cross-sec-tional time-series analysis of fiscal and monetary policies, I show that the policy divergence between levels of government shrinks when provincial governments have greater fiscal power and there are high degrees of party centralization across levels of government. These findings have important implications for the political economy of market reform, the widespread move toward fiscal decentralization, and the design of regional supranational institutions. [ABSTRACT FROM AUTHOR]