Inefficient predation and political transitions

Michael Dorsch and Paul Maarek

European Journal of Political Economy, 2015, vol. 37, issue C, 37-48

Abstract: This paper presents a theory of endogenous economic institutions in non-democracies, where political accountability is enforced through the threat of revolution. We consider a dynamic game between an elite ruling class and a disenfranchised working class, in which workers have imperfect information about the economy's productive possibilities. We characterize the conditions under which (i) the elite implement an inefficient rent-creating economic institution at the risk of provoking a revolution based on institutional grievances, (ii) information shocks can catalyze revolutionary movements that may be contagious among similar countries, and (iii) democratic transitions can be consolidated following revolutionary liberalizations.

Keywords: Inefficient institutions; Revolution; Economic liberalization; Contagion; Democratic consolidation (search for similar items in EconPapers)
JEL-codes: D72 D74 P48 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:37:y:2015:i:c:p:37-48

DOI: 10.1016/j.ejpoleco.2014.10.010

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