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The Political Economy of Guyana’s Underdevelopment

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  • Tarron Khemraj

    (New College of Florida
    University of West Indies)

Abstract

Using a history-inspired game theoretic approach, the paper shows how dictatorship and pro-ethnic voting under democracy, in a society characterized by bi-communal polarization, can result in sub-optimal economic performance. The relatively poor economic outcome is facilitated by an adverse institutional construct, the constitution, which inadvertently encourages low intensity but persistent ethnic rivalry. Mutual distrust in how the other side will vote on the day of secret ballot induces the members of each group to vote for their respective elites, hence non-cooperation. The model is extended to include Gintis’ psychic gain parameter that shows cooperation is possible in the prisoners’ dilemma framework. The latter theoretical result implies a policy proposal of constitutional reform that promotes inter-group cooperation of the distribution of economic resources.

Suggested Citation

  • Tarron Khemraj, 2016. "The Political Economy of Guyana’s Underdevelopment," The Review of Black Political Economy, Springer;National Economic Association, vol. 43(3), pages 325-342, December.
    • Handle: RePEc:spr:blkpoe:v:43:y:2016:i:3:d:10.1007_s12114-016-9239-4
    DOI: 10.1007/s12114-016-9239-4
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    References listed on IDEAS

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    Cited by:

    1. Constantine, Collin & Khemraj, Tarron, 2019. "Geography, economic structures and institutions: A synthesis," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 371-379.
    2. Pasha, Sukrishnalall, 2020. "The impact of political instability on economic growth: the case of Guyana," MPRA Paper 103145, University Library of Munich, Germany.
    3. Aleksandr V. Gevorkyan & Jacob Assa, 2021. "Poverty in “Transition”: 30 Years After and in the Pandemic," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(4), pages 1233-1258, September.

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    More about this item

    Keywords

    Prisoners’ dilemma; Economic ethnic security dilemma; Ethnic polarization; Strategic voting;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • N96 - Economic History - - Regional and Urban History - - - Latin America; Caribbean

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