Democratization and Barriers to Entry in a Two-Dimensional Voting Model

Dmitry Veselov

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: We propose a simple quality-ladder model with heterogeneous agents differing in their skills and wealth endowment to explain the persistence of barriers to entry in new democracies. In the model agents vote for a rate of redistribution and for the level of barriers to entry, which protect the incumbent firms from competition with new entrants. We show that even if a society democratizes, under certain conditions this leads only to the rise of redistribution, rather than to the elimination of barriers to entry. We show that this argument is particularly relevant for countries with a low level of human capital and high inequality in incomes and in skills

Keywords: Barriers to entry; majority voting; quality-ladders model; income inequality; skills inequality; persistence of economic institutions (search for similar items in EconPapers)
JEL-codes: O33 P16 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015-01
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-pol
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ftp://mse.univ-paris1.fr/pub/mse/CES2015/15004.pdf (application/pdf)

Related works:
Working Paper: Democratization and Barriers to Entry in a Two-Dimensional Voting Model (2015)
Working Paper: Democratization and Barriers to Entry in a Two-Dimensional Voting Model (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:15004

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