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When will a Dictator be Good?

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  • Ling Shen

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Abstract

Dictatorship is the predominant political system in many developing countries. However, different dictators act quite differently: a good dictator implements growth-enhancing economic policies, e.g. investment in public education and infrastructure, whereas a bad dictator expropriates wealth of her citizens for her own consumption. The present paper provides a theoretical model by deriving underlying determinants of dictatorial behavior. We assume that the engine of economic growth is private investment. It can increase the productivity of individuals who invest, as well as the aggregate technological level. A good dictator encourages this investment in order to expropriate more. However, the cost of this encouragement is that the ensuing higher growth rate will induce earlier democratization. In this paper we will illustrate the trade-off between economic benefits from a growth-enhancing policy in the short run and the shorter life-time of the dictator in the long run. Furthermore, we will find that the higher the return from private investments is the less likely the dictator will be a good one. Contrary to McGuire and Olson (1996) we find that a long life-time does not always induce positive incentives among dictators.

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 31 (2007)
Issue (Month): 2 (May)
Pages: 343-366

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Handle: RePEc:spr:joecth:v:31:y:2007:i:2:p:343-366

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Related research

Keywords: Dictatorship; Political transition; Economic growth; D72; D74; H2; O12; P16;

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References

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Cited by:
  1. Mizuno, Nobuhiro & Naito, Katsuyuki & Okazawa, Ryosuke, 2012. "Inequality, extractive institutions, and growth in nondemocratic regimes," MPRA Paper 41434, University Library of Munich, Germany.
  2. A. Akerman & A. Larsson & A. Naghavi, 2011. "Autocracies and Development in a Global Economy: A Tale of Two Elites," Working Papers wp775, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. Zenthöfer, A.F., 2013. "Essays on development economics," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5906745, Tilburg University.
  4. Ramin Dadasov & Philipp Harms & Oliver Lorz, 2013. "Financial integration in autocracies: Greasing the wheel or more to steal?," Economics of Governance, Springer, vol. 14(1), pages 1-22, February.
  5. Kirill Borissov & Stéphane Lambrecht, 2009. "Growth and distribution in an AK-model with endogenous impatience," Economic Theory, Springer, vol. 39(1), pages 93-112, April.
  6. Helios Herrera & César Martinelli, 2013. "Oligarchy, democracy, and state capacity," Economic Theory, Springer, vol. 52(1), pages 165-186, January.
  7. Seim, Anna Larsson & Parente, Stephen L., 2013. "Democracy as a middle ground: A unified theory of development and political regimes," European Economic Review, Elsevier, vol. 64(C), pages 35-56.
  8. Che, Jiahua & Chung, Kim-Sau & Qiao, Xue, 2013. "The good, the bad, and the civil society," Journal of Public Economics, Elsevier, vol. 106(C), pages 68-76.
  9. Amegashie, J. Atsu, 2008. "Autocratic rule in ethnically-diverse societies," MPRA Paper 8933, University Library of Munich, Germany.
  10. Alessandro Riboni, 2013. "Ideology and endogenous constitutions," Economic Theory, Springer, vol. 52(3), pages 885-913, April.
  11. Kai Konrad & Wolfgang Leininger, 2011. "Self-enforcing norms and efficient non-cooperative collective action in the provision of public goods," Public Choice, Springer, vol. 146(3), pages 501-520, March.
  12. Giacomo De Luca & Anastasia Litina & Petros G. Sekeris, 2012. "Growth-Friendly Dictatorships," Working Papers 1209, University of Namur, Department of Economics, revised Sep 2012.
  13. Alexander Libman, 2012. "Democracy, size of bureaucracy, and economic growth: evidence from Russian regions," Empirical Economics, Springer, vol. 43(3), pages 1321-1352, December.
  14. Jiancai Pi, 2008. "A Political Economy Pattern of China's History: On Revolution, Reform, and Involution under Dictatorship," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 6(1), pages 21-27.

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