Democratization and Barriers to Entry in a Two-Dimensional Voting Model

Dmitry Veselov

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Abstract: We propose a simple quality-ladder model with heterogeneous agents differing in their skills and wealth endowment to explain the persistence of barriers to entry in new democracies. In the model agents vote for a rate of redistribution and for the level of barriers to entry, which protect the incumbent firms from competition with new entrants. We show that even if a society democratizes, under certain conditions this leads only to the rise of redistribution, rather than to the elimination of barriers to entry. We show that this argument is particularly relevant for countries with a low level of human capital and high inequality in incomes and in skills.

Keywords: barriers to entry; majority voting; quality-ladders model; income inequality; skills inrequality; skills inequality; persistence of economic institutions (search for similar items in EconPapers)
Date: 2015-01
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01158139
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Published in 2015

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Related works:
Working Paper: Democratization and Barriers to Entry in a Two-Dimensional Voting Model (2015)
Working Paper: Democratization and Barriers to Entry in a Two-Dimensional Voting Model (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01158139

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