Elites, Portfolio Diversification, and the Politics of Development and Redistribution

That economic elites exert influence in democratic systems where each citizen's vote counts equally is not a novel idea. Scholars have long been interested in disentangling whether, how and to what extent this small minority influences the policymaking process. I take on this puzzle and study the historical roots of economic elites’ capacity to shape policies with high impact on development and redistribution. I propose that the diversification structure of elites’ asset portfolio during the transition from a traditional to a modern economy explains the emergence of different types of networks, and thus alternative modes of relation, between economic and political actors, and that these early configurations have short- and long-run consequences for development and redistribution. I test my argument in Argentina and Chile from the mid- nineteenth to the late-twentieth centuries, exploiting variation at the country, subnational, and individual levels, and using original micro-level data on intra-elite networks gathered from previously untapped archives.