Sectoral Public Power and Endogenous Growth

David Mayer-Foulkes

Economía Mexicana NUEVA ÉPOCA, 1997, vol. VI, issue 1, 33-81

Abstract: We study growth in an economy composed of sectors producing specific goods with advantage under fragmented competition. The government allocates public inputs. Sectorial political power defines government objectives and restrictions, and consists of passive resistance (bounding taxation), organized resistance (an effective minimum welfare demand), and socially organized power (pushing Sectorial objectives). Income distribution and growth, mechanisms and incentives for public investment allocation, and political organization incentives, are strikingly different functions of input dependence and political power in open and closed economies. Long-term political economy equilibria and tendencies in political transition due to technical or trade policy changes can be modeled.

Date: 1997
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