The State Independent from voters: Rent Revenue Incomes and the Resource Curse

Vladimir Mau, Ilia Zatcovecky and Konstantin Yanovskiy
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Ilia Zatcovecky: Samuel Neaman Institute for Advanced Studies in Science and Technology

Working Papers from Gaidar Institute for Economic Policy

Abstract: If the authorities have the opportunity to receive incomes uncontrolled by society, this gives them great freedom of action. Such incomes do not depend on the quality of the public goods delivered, nor on the investment climate. Given a certain minimal level of organization, taxpayers can try to impose on the government, which needs their money, their own terms for using the resources received (and history has shown that this can often be done successfully). The history of many modern parliaments began with gatherings convened by the people whose money and armed forces made up the might of the state. The absence of a need for the regime in power to ask its subjects for financial support in return for guarantees and privileges makes the regime’s forces, which are far superior in comparison with any individual market agent’s capacity, practically uncompensated for in any way. And if the government’s incomes enable it to offer bribes to citizens, then the authorities’ uncontrollability can weaken or even destroy the democratic institutions already in existence. Under such conditions, there can be no talk of constraints capable of providing universal secure guarantees for business independently of the will of the ruler..

Keywords: Rent revenue; voters' corruption; voters bribe; demand for institutions (search for similar items in EconPapers)
JEL-codes: D72 D73 O33 P16 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014, Revised 2014
New Economics Papers: this item is included in nep-cdm, nep-ene and nep-pol
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https://www.iep.ru/files/RePEc/gai/wpaper/0089Mau.pdf Revised version, 2013 (application/pdf)

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