All rulers face political competition, both from rivals within their state, and from other states to which their subjects may exit. In a simple model, both kinds of competition are substitutes. Internal competition (democracy) bene?ts citizens by allowing them to replace rent-seeking rulers. But it also weakens these rulers' incentives to invest. External competition forces rent-seeking rulers to invest so as to prevent migration. As a result, citizens are less willing to ?ght for democracy, and rulers are less eager to oppose it, when external competition is high. In a panel of countries, there are fewer changes towards democracy when states have low GDP relative to their neighbours.
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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek in its series Jena Economic Research Papers in Economics with number
2009-067.
Find related papers by JEL classification: D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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