Particularism, dominant minorities and institutional change
Raouf Boucekkine,
Rodolphe Desbordes (rodolphe.desbordes@skema.edu) and
Paolo Melindi-Ghidi
Additional contact information
Rodolphe Desbordes: SKEMA Business School-UCA
No 2019017, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)
Abstract:
We develop a theory of institutional transition from dictatorship to minority dominant-based regimes. We depart from the standard political transition framework à la Acemoglu-Robinson in four essential ways: (i) population is heterogeneous, there is a minority/majority split, heterogeneity being generic, simply reflecting subgroup size; (ii) there is no median voter in the post-dictatorship period, political and economic competition is favorable to the minority (fiscal particularism); (iii) (windfall) resources are introduced, and (iv) we distinguish between labor income and resources, and labor supply is endogenous. We first document empirically fiscal particularism, its connection with resource endowment, and the impact of both on revolutionary bursts. Second, we construct a full-fledged model incorporating the four characteristics outlined above. We show, among others, that polarization is a sufficient condition for revolutions, while resource rents are not: they do matter though when polarization is low. In agreement with our empirical facts, countries engaging in revolutions tend to be slightly less resource-rich than other countries. We also outline the interplay between resource rents, polarization and labor market conditions at the dawn of institutional change. Our theory is appropriate to understand the institutional dynamics in highly homogeneous resource-rich countries, which after post-independence autocratic regimes, turn to be dominated by minorities, Algeria being the paradigmatic case.
Keywords: Political transition; minority/majority; fiscal particularism; dominant minority; resources; labor market (search for similar items in EconPapers)
JEL-codes: C73 D72 Q32 (search for similar items in EconPapers)
Date: 2019-10-14
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Citations: View citations in EconPapers (4)
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Related works:
Working Paper: Particularism, dominant minorities and institutional change (2019)
Working Paper: Particularism, dominant minorities and institutional change (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2019017
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