Populist policies in the transition to democracy
AbstractThis paper develops a political economy model that provides an explanation as for why ruling elites in oligarquic societies may rely on income redistribution to the poor (the masses) in order to prevent them from attempting a revolution. We refer to this kind of redistribution as populist redistribution because, first it does not increase the poorâs productive capacity (human capital), and second it seeks to âbuyâ political support (peace) to perpetuate the eliteâs control of political power. We examine the conditions under which ruling elites choose to deter the poor (by means of military repression and/or populist redistribution), to engage in a dispute with the poor for the control of political power, or, alternatively, to extend democracy. According to the results of the model populist redistribution (or military repression), if any, increases with initial wealth inequality and with the amount of redistribution that the poor can undertake under democracy, and decreases with the relative importance of a human capital externality in production. The model explains why in some cases the use of an apparently ine cient policy of populist redistribution turns out to be optimal for both groups (the ruling elite and the poor class) when the alternative is to use of military repression or default to conflict.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Political Economy.
Volume (Year): 23 (2007)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/inca/505544
Other versions of this item:
- Daniel Mejía & Carlos Esteban Posada, . "Populist Policies in the Transition to Democracy," Borradores de Economia 349, Banco de la Republica de Colombia.
- Daniel Mejía & Carlos Esteban Posada, 2005. "Populist Policies In The Transition To Democracy," BORRADORES DE ECONOMIA 003357, BANCO DE LA REPÚBLICA.
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- D30 - Microeconomics - - Distribution - - - General
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