Political Geography of Public Goods: Political versus Economic Elites
There is a broad agreement among scholars that the political elite's ability and willingness to provide equal access to public goods and services for all decrease inequality and promote economic development. Most accounts focus on the incentives of the state to finance and invest public goods, such as electoral success and fostering economic development. However, the state's involvement in taxing citizens to finance most public goods is a modern concept. Most premodern states engaged in taxation to finance warfare, not necessarily to fund sanitary drinking water provision or education. It was often the economic or the religious elite who invested in such projects. Given the prevalence of public goods for the well-being of the citizens and economic prosperity, several important questions emerge: What are the distributional implications of the private provision of public goods? How do the economic elites' incentives differ from political elites' incentives in investing in public projects? How do the changing wealth trajectories of different groups affect the political geography of public goods? How does ethnic fractionalization impact the distribution of privately financed public goods, especially when the economic elite represents only one ethnic group?
This book project addresses these questions using historical data from Ottoman Istanbul on public goods from 1600 to 1900. First, I demonstrate that the economic elite has different incentives to finance public goods than the political elite. While the political elite is interested in maximizing electoral success in democratic settings and minimizing the probability of a revolt in authoritarian regimes through an egalitarian service provision, the economic elite choose to invest in public goods to make sure they have access to certain services, which creates geographical inequalities. I also posit that the changing anatomy of power and wealth between groups has distributional implications. In the context of Ottoman Istanbul, I empirically show that shifting economic power from Muslims to Non-Muslims altered the geography of modern public services in the city throughout this period. As Muslims lost economic superiority over non-Muslims, they also relinquished their advantage in access to public services. This was a significant reversal of fortunes: most of the European visitors to Istanbul in the 1600s wrote about the abundance of public fountains, public baths, soup kitchens, and hospitals in the walled city of Istanbul, traditionally settled by the Muslim elites of the Empire. However, at the start of the twentieth century, European observers were more impressed by the modern infrastructure of the Pera quarter, home to most of the non-Muslim population of Istanbul at the time. During this period, neighborhoods within the walled city of Istanbul would be considered infrastructural laggards. Almost none of the modern public infrastructure, such as city lights, modern public transportation, or sanitary water provision, was available to the Muslim elites.
This book project is not only relevant for the historical political economy of the Middle East but it also informs current social and political debates in many places. As most of the economic elites choose to channel their earnings into trusts and foundations, a theoretical and an empirical study on the distributional implications of private financing of public services fills an important gap in the literature.