 Dictators and Oligarchs: A Dynamic Theory of Contested Property RightsSergei Guriev and Konstantin Sonin Post-Print from HAL 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 property rights will emerge spontaneously. We explicitly model a dynamic game between the 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. Keywords: Property rights; Oligarchy; Dictatorship; Non-democratic politics (search for similar items in EconPapers) Published in Journal of Public Economics, 2009, 93 (1-2), pp.1 - 13. ⟨10.1016/j.jpubeco.2008.07.003⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03415733 DOI: 10.1016/j.jpubeco.2008.07.003 Access Statistics for this paper More papers in Post-Print from HAL |
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