The Dynamics of Lobbying under Uncertainty: On Political Liberalization in Arab Countries
AbstractWe consider a framework à la Wirl (1994) where political liberalization is the outcome of a lobbying differential game between a conservative elite and a reformist group, the former player pushing against political liberalization in opposition to the latter. In contrast to the benchmark model, we introduce uncertainty. We consider the typical case of an Arab oil exporter country where oil rents are fiercely controlled by the conservative elite. We assume that the higher the oil rents, the more reluctant to political liberalization the elite is. Two states of nature are considered (high vs low resource rents). We then compute the Market-perfect equilibria of the corresponding piecewise deterministic differential game. It is shown that introducing uncertainty in this manner increases the set of strategies compared to Wirl's original setting. In particular, it is shown that the cost of lobbying might be significantly increased under uncertainty with respect to the benchmark. This ultimately highlights some specificities of the political liberalization at stake in Arab countries and the associated risks.
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Bibliographic InfoPaper provided by Aix-Marseille School of Economics, Marseille, France in its series AMSE Working Papers with number 1317.
Length: 21 pages
Date of creation: 15 Mar 2013
Date of revision:
Rent-seeking; lobbying; natural resources; Arab countries; piecewise deterministic differential games;
Other versions of this item:
- Raouf Boucekkine & Fabien Prieur & Klarizze Puzon, 2013. "The Dynamics of Lobbying under Uncertainty: On Political Liberalization in Arab Countries," Working Papers halshs-00801961, HAL.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-30 (All new papers)
- NEP-ARA-2013-03-30 (MENA - Middle East & North Africa)
- NEP-CDM-2013-03-30 (Collective Decision-Making)
- NEP-ENE-2013-03-30 (Energy Economics)
- NEP-GTH-2013-03-30 (Game Theory)
- NEP-POL-2013-03-30 (Positive Political Economics)
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