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Partisan Competition, Growth and the Franchise

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  • Humberto Llavador
  • Robert J. Oxoby

Abstract

The nineteenth century was a time of substantial changes in the patterns of economic growth. This was also a period of significant fluctuations in the structure of and allocation of political rights. Through successive franchise extensions, democracy expanded dramatically, giving birth to the first wave of democratization. The concurrence of these changes in the patterns of economic growth and political voice are not coincidental. In this paper we develop a general equilibrium model of political competition in which ideological parties representing elites use the allocation of voting rights to influence implemented policies. In turn, these policies influence the character of economic growth. We find in the social structure of society an explanation for the connection between enfranchisement and growth: When (1) there exist an economic conflict among the elite, (2) the landed classes are not politically strong, and (3) there exists a critical mass of urban (industrial) workers, we observe both growth and democratization. The lack of conditions (1) or (2) resolves in stagnant autocracies while the absence of condition (3) drives growth-deterring democratic expansions. Hence, too much and too little democracy can be bad for growth. Furthermore, economic growth may, ceteris paribus, naturally lead to diffusion of voting rights.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 109.

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Date of creation: Jan 2004
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Handle: RePEc:bge:wpaper:109

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Keywords: Franchise; growth; political competition; elites; industrialization;

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