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Inefficient predation, information, and contagious institutional change

Michael Dorsch and Paul Maarek ()

MPRA Paper from University Library of Munich, Germany

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: 2012-04
New Economics Papers: this item is included in nep-cdm and nep-cta
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Working Paper: Inefficient Predation, Information, and Contagious Institutional Change (2012) Downloads
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