Inefficient Predation, Information, and Contagious Institutional Change

Paul Maarek and Michael Dorsch ()
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Michael Dorsch: The American University of Paris

No 2012-32, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This paper presents an agency theory of revolutionary political transitions from autocracy to democracy. We model authoritarian economic policy as the equilibrium outcome of a repeated game between an elite ruling class and a disenfranchised working class, in which workers have imperfect information about the elite's policy choice and the economy's productive capacity. We characterize the conditions under which, in equilibrium, (i) the elite will set inefficient economic institutions under the threat of revolution, (ii) information shocks can catalyze democratic revolutions that may be contagious among similar countries, and (iii) democracy can be consolidated following a political transition.

Keywords: Political transition; Revolution; Asymmetric information; Contagion; Democratic consolidation; Arab Spring (search for similar items in EconPapers)
JEL-codes: D71 D74 P48 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-cta and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Inefficient predation, information, and contagious institutional change (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2012-32

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