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The demographics of expropriation risk

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  • Philipp Harms

    ()

  • Philipp Meulen

Abstract

It is often argued that capital should flow from aging industrialized economies to countries with fast-growing populations. However, institutional failures and the risk of expropriation substantially reduce developing economies’ attractiveness for foreign investors. We analyze the influence of a country’s demographic structure on international investment, using a political-economy model in which population growth potentially affects the risk of expropriation. We first explore how redistributive expropriation affects the welfare of different age groups and derive the government’s incentive to expropriate. We then analyze how the relative size of different generations influences the feasible volume of foreign investment

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Bibliographic Info

Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 25 (2012)
Issue (Month): 3 (July)
Pages: 809-832

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Handle: RePEc:spr:jopoec:v:25:y:2012:i:3:p:809-832

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Keywords: International investment; Political economy; Demographics; F21; D78; J10;

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References

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Citations

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Cited by:
  1. Philipp an de Meulen, 2011. "Labor Heterogeneity and the Risk of Expropriation in Less Developed Countries," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0298, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Lena Calahorrano & Philipp an de Meulen, 2011. "Demographics and Factor Flows – A Political Economy Approach," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0299, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  3. Harms, Philipp & an de Meulen, Philipp, 2013. "Demographic structure and the security of property rights: The role of development and democracy," European Journal of Political Economy, Elsevier, vol. 29(C), pages 73-89.
  4. Markus Alzer & Ramin Dadasov, 2013. "Financial Liberalization and Institutional Development," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 25(3), pages 424-452, November.

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