Redistribution and the political support of free entry policy in the Schumpeterian model with heterogenous agents
AbstractWe consider the problem of finding sufficient conditions for political support of liberal, growth-enhancing policy in a quality-ladders model with heterogeneous agents differing in their endowment of wealth and skills. The policy set is two-dimensional: Agents vote for the level of redistribution as well as for the level of entry barriers preventing the creation of more efficient firms. We show that under the majority voting rule there are three possible stable political outcomes: full redistribution, low redistribution and low barriers for entry (“liberal” order), high redistribution and high barriers for entry (“corporatism”). We show that key variables determining the political outcome are the expected gain from technological adoption, the ratio of total profits to total wages, and the skewness of human capital distribution.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 28/EC/2013.
Length: 29 pages
Date of creation: 2013
Date of revision:
Publication status: Published in WP BRP Series: Economics / EC, April 2013, pages 1-29
economic systems; political barriers for growth; majority voting; quality-ladders model; wealth inequality; talent inequality; economic growth;
Other versions of this item:
- Dmitry A. Veselov, 2013. "Redistribution and the political support of free entry policy in the Schumpeterian model with heterogenous agents," Documents de travail du Centre d'Economie de la Sorbonne 13050, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Dmitry A. Veselov, 2013. "Redistribution and the political support of free entry policy in the Schumpeterian model with heterogenous agents," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00830027, HAL.
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-06 (All new papers)
- NEP-CDM-2013-12-06 (Collective Decision-Making)
- NEP-MAC-2013-12-06 (Macroeconomics)
- NEP-POL-2013-12-06 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cecilia García-Peñalosa & Jean-François Wen, 2008. "Redistribution and entrepreneurship with Schumpeterian growth," Journal of Economic Growth, Springer, vol. 13(1), pages 57-80, March.
- Oded Galor & Omer Moav & Dietrich Vollrath, 2009.
"Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence,"
Review of Economic Studies,
Oxford University Press, vol. 76(1), pages 143-179.
- Oded Galor & Omar Moav & Dietrich Vollrath, 2006. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions, and the Great Divergence," DEGIT Conference Papers c011_001, DEGIT, Dynamics, Economic Growth, and International Trade.
- Galor, Oded & Moav, Omer & Vollrath, Dietrich, 2008. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions and the Great Divergence," CEPR Discussion Papers 6751, C.E.P.R. Discussion Papers.
- Krusell, P. & Rios-Rull, J.V., 1993.
"Vested Interests in a Positive Theory of Stagnation and Growth,"
547, Stockholm - International Economic Studies.
- Krusell, Per & Rios-Rull, Jose-Victor, 1996. "Vested Interests in a Positive Theory of Stagnation and Growth," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 301-29, April.
- Raquel Fernandez & Richard Rogerson, 1994.
"On the political economy of education subsidies,"
185, Federal Reserve Bank of Minneapolis.
- Stephen L. Parente & Rui Zhao, 2006. "Slow Development And Special Interests," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(3), pages 991-1011, 08.
- Howitt, Peter & Mayer-Foulkes, David, 2005.
"R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 37(1), pages 147-77, February.
- Peter Howitt & David Mayer-Foulkes, 2002. "R&D, Implementation and Stagnation: A Schumpeterian Theory of Convergence Clubs," NBER Working Papers 9104, National Bureau of Economic Research, Inc.
- Alberto Bucci, 2011. "Product-Variety, Population, Competition, and Growth," DEGIT Conference Papers c016_006, DEGIT, Dynamics, Economic Growth, and International Trade.
- Gilat Levy, 2005. "The Politics of Public Provision of Education," The Quarterly Journal of Economics, MIT Press, vol. 120(4), pages 1507-1534, November.
- Daron Acemoglu, 2008.
"Oligarchic Versus Democratic Societies,"
Journal of the European Economic Association,
MIT Press, vol. 6(1), pages 1-44, 03.
- David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamil Abdulaev) or (Victoria Elkina).
If references are entirely missing, you can add them using this form.