Centralized institutions and cascades

Jared Rubin

Journal of Comparative Economics, 2014, vol. 42, issue 2, 340-357

Abstract: Why do sudden and massive social, economic, and political changes occur when and where they do? Are there institutional preconditions that encourage such changes when present and discourage such changes when absent? I employ a general model which suggests that cascades which induce massive equilibrium changes are more likely to occur in regimes with centralized coercive power, defined as the ability to impose more than one type of sanction (economic, legal, political, social, or religious). Centralized authorities are better able to suppress subversive actions when external shocks are small, as citizens have little incentive to incur numerous types of sanctions. However, citizens are also more likely to lie about their internal preferences in such regimes (e.g., falsely declare loyalty to an oppressive government), entailing that larger shocks are more likely to trigger a cascade to a vastly different equilibrium. The model is applied to the severity of protests that followed austerity measures taken in developing nations since the 1970s.

Keywords: Institutions; Centralization; Revolution; Cascades; Preference falsification (search for similar items in EconPapers)
JEL-codes: D71 D74 H11 H89 K19 P59 Z10 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Centralized institutions and cascades (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:42:y:2014:i:2:p:340-357

DOI: 10.1016/j.jce.2013.11.002

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