Political Economy in a Changing World

Daron Acemoglu, Georgy Egorov and Konstantin Sonin

No 19158, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We provide a general framework for the analysis of the dynamics of institutional change (e.g., democratization, extension of political rights or repression of different groups), and how these dynamics interact with (anticipated and unanticipated) changes in the distribution of political power and in economic structure. We focus on the Markov Voting Equilibria, which require that economic and political changes should take place if there exists a subset of players with the power to implement such changes and who will obtain higher expected discounted utility by doing so. Assuming that economic and political institutions as well as individual types can be ordered, and preferences and the distribution of political power satisfy natural "single crossing" (increasing differences) conditions, we prove the existence of a pure-strategy equilibrium, provide conditions for its uniqueness, and present a number of comparative static results that apply at this level of generality. We then use this framework to study the dynamics of political rights and repression in the presence of radical groups that can stochastically grab power. We characterize the conditions under which the presence of radicals leads to repression (of less radical groups), show a type of path dependence in politics resulting from radicals coming to power, and identify a novel strategic complementarity in repression.

JEL-codes: C71 D71 D74 (search for similar items in EconPapers)
Date: 2013-06
New Economics Papers: this item is included in nep-cdm, nep-mic, nep-pol and nep-upt
Note: POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published as Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2015. "Political Economy in a Changing World," Journal of Political Economy, University of Chicago Press, vol. 123(5), pages 1038 - 1086.

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Related works:
Journal Article: Political Economy in a Changing World (2015)
Working Paper: Political Economy in a Changing World (2013)
Working Paper: Political Economy in a Changing World (2013)
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