Why do dictators like white elephants? An application of the all-pay auction

Marco Magnani

Economics Bulletin, 2013, vol. 33, issue 3, 2260-2269

Abstract: The present paper studies the provision of big and inefficient public investments in proprietary states. By means of these investments, whose rate of return is either nil or negative, an incumbent dictator can transfer resources to his/her supporters and obtain a head-start advantage in the contest with a challenger. These projects are realized only if they are not too inefficient and more importantly, big enough to provide a large enough head-start advantage.

Keywords: Investment; Political Economy; Contests; Proprietary States. (search for similar items in EconPapers)
JEL-codes: C7 H5 (search for similar items in EconPapers)
Date: 2013-09-05
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