Politics, information and the urban bias

Governments in many LDCs skew public resources towards urban sectors, despite a majority of citizens residing in rural areas. This paper develops a novel political argument for this urban-bias phenomenon in a framework where all voters, rural and urban, have equal voice, but differ in their access to information. We argue that this difference is sufficient to give governments an incentive to inefficiently over-allocate resources towards urban areas. The bias is shown to worsen during adverse economic times, leading to increased migration. We also examine how voter informativeness affects efficiency of the electoral process in weeding out incompetent governments. (c) 2004 Elsevier B.V. All rights reserved.