The Politics of Co-optation and the Origin of the Welfare State

Graziella Bertocchi (), Jody Overland () and Michael Spagat

No 98/11, Royal Holloway, University of London: Discussion Papers in Economics from Department of Economics, Royal Holloway University of London

Abstract: By promoting some of the poor into the middle class and thereby co-opting them into the system, a self-interested elite reduces the threat of political instability and the risk of being overthrown. Co-optation is accomplished through the transfer of resources to some of the poor, enabling them to enter the middle-class - a group with sufficient income to make the overthrow of the existing order a dominated choice. The resulting dynamic model captures the early evolution of the welfare state, society's class structure and political stability. A more elitist economy, i.e., one beginning with a larger elite and poor class, and a smaller middle class, exhibits larger transfers and a steady state with fewer poor than does an economy that begins with a larger middle class. The more poverty stricken are the poor, the smaller will be the steady-state poor class. Improvements in revolutionary technology decrease the size of the steady-state poor class.

Keywords: Co-optation; Welfare State; Politics; Revolution; Growth; Re-distribution. Transfers. (search for similar items in EconPapers)
JEL-codes: D7 E6 H1 (search for similar items in EconPapers)
Pages: 29 pages
Date: 1998-01, Revised 1998-01
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