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Consensual and Conflictual Democratization

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  • Cervellati, Matteo
  • Fortunato, Piergiuseppe
  • Sunde, Uwe

Abstract

This paper studies the interactions between democratization and theemergence of rule of law. We propose a model in which heterogeneousindividuals can make costly investments to protect their income againstexpropriation. The public enforcement of property rights is chosen bythe enfranchised population whose composition depends on the politicalregime in place. We characterize the politico-economic equilibria interms of property rights protection and political regime, and study therole of the different scenarios of democratization. The results suggest:(i) unequal control of natural resources is a central structuraldeterminant of the democratization scenario; (ii) democratic transitionsunder conflict may lead to failed democracies with poor rule of law;(iii) that democratic transitions supported by a large consensus mayserve as a coordination device thereby leading to better protection ofproperty rights and more stable polities.

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  • Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2012. "Consensual and Conflictual Democratization," Munich Reprints in Economics 20086, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:20086
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    Cited by:

    1. Lagunoff, Roger, 2009. "Dynamic stability and reform of political institutions," Games and Economic Behavior, Elsevier, vol. 67(2), pages 569-583, November.
    2. Jinhui H. Bai & Roger Lagunoff, 2011. "On the Faustian Dynamics of Policy and Political Power," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(1), pages 17-48.
    3. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2011. "Democratization and Civil Liberties: The Role of Violence During the Transition," IZA Discussion Papers 5555, Institute of Labor Economics (IZA).
    4. Roger Lagunoff (Georgetown University), 2005. "Markov Equilibrium in Models of Dynamic Endogenous Political Institutions," Working Papers gueconwpa~05-05-07, Georgetown University, Department of Economics.
    5. Buchheim, Lukas & Ulbricht, Robert, 2014. "Dynamics of Political Systems," TSE Working Papers 14-464, Toulouse School of Economics (TSE), revised Oct 2018.
    6. Gradstein, Mark, 2007. "Institutional Traps and Economic Growth," CEPR Discussion Papers 6414, C.E.P.R. Discussion Papers.
    7. 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.
    8. 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.
    9. Navarat Temsumrit, 2020. "Does Democracy Affect Cyclical Fiscal Policy? Evidence From Developing Countries," PIER Discussion Papers 125, Puey Ungphakorn Institute for Economic Research.
    10. Roger Lagunoff, 2004. "The Dynamic Reform of Political Institutions," Econometric Society 2004 Latin American Meetings 47, Econometric Society.
    11. Kotschy, Rainer & Sunde, Uwe, 2017. "Democracy, inequality, and institutional quality," European Economic Review, Elsevier, vol. 91(C), pages 209-228.
    12. Piergiuseppe Fortunato, 2015. "Democratic Government and Development: A Survey," Asian Development Review, MIT Press, vol. 32(2), pages 153-177, September.
    13. Matteo Cervellati & Piergiuseppe Fortunato & Uwe Sunde, 2008. "Hobbes to Rousseau: Inequality, Institutions and Development," Economic Journal, Royal Economic Society, vol. 118(531), pages 1354-1384, August.
    14. Gradstein, M., 2007. "Institutional Traps and Economic Growth," Cambridge Working Papers in Economics 0769, Faculty of Economics, University of Cambridge.
    15. Buchheim, Lukas & Ulbricht, Robert, 2014. "Emergence and Persistence of Extreme Political Systems," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 461, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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