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Consensual and Conflictual Democratization

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Author Info

  • Cervellati, Matteo

    ()
    (University of Bologna)

  • Fortunato, Piergiuseppe

    ()
    (UNCTAD)

  • Sunde, Uwe

    ()
    (University of Munich)

Abstract

We study the process of endogenous democratization from inefficient oligarchic systems in an economy where heterogeneous individuals can get involved in predation activities. The features of democracies are shown to be crucially related to the conditions under which democratization initially takes place. The political regime and the extent of redistribution implemented under it depend on the allocation of de facto political power across the different social groups. The cost of public enforcement of property rights depends on the extent of predation activities in the economy. The theory highlights the importance of inequality in natural resources and availability of human capital for endogenous democratic transitions. Multiple politico-economic equilibria can be sustained conditional on expectations about property rights enforcement. This generates history dependence. Democratic transitions supported by a large consensus serve as coordination device and lead to better protection of property and more stable political systems than democratic transitions imposed in conflictual environments. We test the novel predictions using available cross-country data. The link between the type of democratic transition and the outcomes under democracy is also investigated using novel data on constitutional principles. The findings support the theoretical predictions.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2225.

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Length: 53 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2225

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Related research

Keywords: oligarchy; conflict; consensual democracy; inequality; commitment; constitutional principles; democratization;

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Cited by:
  1. Jinhui Bai & Roger Lagunoff, 2007. "On the “Faustian” Dynamics of Policy and Political Power," Levine's Bibliography 122247000000001627, UCLA Department of Economics.
  2. Roger Lagunoff, 2004. "The Dynamic Reform of Political Institutions," Econometric Society 2004 Latin American Meetings 47, Econometric Society.
  3. Roger Lagunoff, 2007. "Markov Equilibrium in Models of Dynamic Endogenous Political Institutions," Levine's Bibliography 122247000000000876, UCLA Department of Economics.
  4. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2005. "Hobbes to Rousseau: Inequality, Institutions, and Development," IZA Discussion Papers 1450, Institute for the Study of Labor (IZA).
  5. Buchheim, Lukas & Ulbricht, Robert, 2014. "Emergence and Persistence of Extreme Political Systems," TSE Working Papers 14-464, Toulouse School of Economics (TSE).
  6. Uwe Sunde, 2006. "Wirtschaftliche Entwicklung und Demokratie - Ist Demokratie ein Wohlstandsmotor oder ein Wohlstandsprodukt?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(4), pages 471-499, November.
  7. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2011. "Democratization and Civil Liberties: The Role of Violence During the Transition," CEPR Discussion Papers 8315, C.E.P.R. Discussion Papers.
  8. Gradstein, M., 2007. "Institutional Traps and Economic Growth," Cambridge Working Papers in Economics 0769, Faculty of Economics, University of Cambridge.
  9. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2014. "Violence during democratization and the quality of democratic institutions," European Economic Review, Elsevier, vol. 66(C), pages 226-247.
  10. Gradstein, Mark, 2007. "Institutional Traps and Economic Growth," CEPR Discussion Papers 6414, C.E.P.R. Discussion Papers.

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