Political labor market, government policy, and stability of a non-democratic regime
AbstractAn important source of stability of a hierarchical non-democratic political regime, such as that of the Soviet Union in the past or China today, is the rulersâ ability to buy the services and political support of activists recruited from the working population in the monopsonistic political labor market. Implicit contracts that underlie this exchange require retirement of incumbents to allow for deferred promotion of activists into rent-paying positions. An analysis of optimal promotion contracts shows that regime stability is consistent with a high income gap between the rulers and the working population, strengthened when government pursues an active investment policy, and not affected positively by government spending on public goods. Predictions of the promotion contract model are tested using Soviet data for the period 1956 to 1968.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Comparative Economics.
Volume (Year): 35 (2007)
Issue (Month): 3 (September)
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Web page: http://www.elsevier.com/locate/inca/622864
Other versions of this item:
- Lazarev, Valery, 2007. "Political labor market, government policy, and stability of a non-democratic regime," MPRA Paper 2352, University Library of Munich, Germany.
- P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
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