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A purpose of the patronage

Last week I heard a comment the purpose of an initiative of a company in Mexico. Well, the boys -who are in the construction business – have developed a whole series of additional services (for example credit) for low-income groups, abandoned by the market.

Now, it is not an initiative as such that I’m going to comment and less to name, but the fact that -from the perspective of the company – its main enemy were the state subsidies. And this because the subsidies were given to build patronage (the people that received money were made on the networks of the politicians they gave themselves) and therefore went against the initiatives of ’entrepreneurship’, that was what the initiative was trying to develop.

However, the shares of the company are -directly – a form of clientelism: Put such-and-such a service (to facilitate the access to credit is a form of subsidy) in such a way that these people are transformed into ‘clients’ (people loyal to the company, that it will be difficult to leave the system). If the evil of political patronage is that people lose autonomy and are subject to political, does the well of the look a client in the private sphere is that people are loyal and continue with the company -i.and to lose autonomy and be subject to the company?

At this point I recalled the old distinction of Hirschman on exit and voice. And how the same behavior (output) is seen as almost treason in a case (the policy) and in the other it is what is expected (economy). Almost we could define the economic realm as the one where output is the option and expected policy where the voice option is expected. It is interesting that the patronage (building of loyalty, and, therefore, decrease the probability of exit), is so positive in the private world to be -in the words of Hirschman – the implementation of a political judgment in this area.