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Why do dictators like white elephants? An application of the all-pay auction

Author

Listed:
  • Marco Magnani

    (Department of Economics, Università degli Studi di Parma)

Abstract

The present paper studies the provision of big and inefficient public investments in proprietary states. By means of these investments, whose rate of return is either nil or negative, an incumbent dictator can transfer resources to his/her supporters and obtain a head-start advantage in the contest with a challenger. These projects are realized only if they are not too inefficient and more importantly, big enough to provide a large enough head-start advantage.

Suggested Citation

  • Marco Magnani, 2013. "Why do dictators like white elephants? An application of the all-pay auction," Economics Bulletin, AccessEcon, vol. 33(3), pages 2260-2269.
    • Handle: RePEc:ebl:ecbull:eb-13-00605
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Investment; Political Economy; Contests; Proprietary States.;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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