Dictators and Oligarchs: A Dynamic Theory of Contested Property Rights

Sergei Guriev and Konstantin Sonin

No w0116, Working Papers from New Economic School (NES)

Abstract: In an economy with weak economic and political institutions, the major institutional choices are made strategically by oligarchs and dictators. The conventional wisdom presumes that as rent-seeking is harmful for oligarchs themselves, institutions such as enforcement of the property rights will emerge eventually. We explicitly model a dynamic game between oligarchs and a dictator, who can contain rent-seeking. The oligarchs choose either a weak dictator (who can be overthrown by an individual oligarch) or a strong dictator (who can only be replaced via a consensus of oligarchs). In equilibrium, no dictator can commit to both: (i) protecting the oligarchs?property rights from the other oligarchs and (ii) not expropriating oligarchs himself. We show that a weak dictator does not limit rent-seeking. A strong dictator does reduce rent-seeking but also expropriates individual oligarchs. We show that even though eliminating rent-seeking is Pareto optimal, weak dictators do get appointed in equilibrium and rent-seeking continues. This outcome is especially likely when economic environment is highly volatile.

Pages: 25 pages
Date: 2007-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.nes.ru/files/Preprints-resh/WP116.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: Dictators and oligarchs: A dynamic theory of contested property rights (2009)
Working Paper: Dictators and Oligarchs: A Dynamic Theory of Contested Property Rights (2009)
Working Paper: Dictators and Oligarchs: A Dynamic Theory of Contested Property Rights (2008)
Working Paper: Dictators and Oligarchs: A Dynamic Theory of Contested Property Rights (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:abo:neswpt:w0116

Access Statistics for this paper

More papers in Working Papers from New Economic School (NES) Contact information at EDIRC.
Bibliographic data for series maintained by Vladimir Ivanyukhin ( this e-mail address is bad, please contact ).