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Political Economy in a Changing World

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  • Daron Acemoglu
  • Georgy Egorov
  • Konstantin Sonin

Abstract

We provide a general framework for the analysis of the dynamics of institutional change (e.g., democratization, extension of political rights or repression of different groups), and how these dynamics interact with (anticipated and unanticipated) changes in the distribution of political power and in economic structure. We focus on the Markov Voting Equilibria, which require that economic and political changes should take place if there exists a subset of players with the power to implement such changes and who will obtain higher expected discounted utility by doing so. Assuming that economic and political institutions as well as individual types can be ordered, and preferences and the distribution of political power satisfy natural “single crossing” (increasing differences) conditions, we prove the existence of a pure-strategy equilibrium, provide conditions for its uniqueness, and present a number of comparative static results that apply at this level of generality. We then use this framework to study the dynamics of political rights and repression in the presence of radical groups that can stochastically grab power. We characterize the conditions under which the presence of radicals leads to repression (of less radical groups), show a type of path dependence in politics resulting from radicals coming to power, and identify a novel strategic complementarity in repression.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19158.

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Date of creation: Jun 2013
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Handle: RePEc:nbr:nberwo:19158

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References

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  1. Gregory, Paul & Schrôder, Philipp & Sonin, Konstantin, 2006. "Dictators, Repression and the Median Citizen: An “Eliminations Model” of Stalin’s Terror (Data from the NKVD Archives)," CEPR Discussion Papers 6014, C.E.P.R. Discussion Papers.
  2. Barbera, S. & Maschler, M. & Shalev, J., 2001. "Voting for Voters: A Model of Electoral Evolution," Games and Economic Behavior, Elsevier, vol. 37(1), pages 40-78, October.
  3. Etro, Federico & Ageloni, Ignazio & Alesina, Alberto, 2005. "International Unions," Scholarly Articles 4553008, Harvard University Department of Economics.
  4. Jack Hirshleifer & Michele Boldrin & David K Levine, 2009. "The Slippery Slope Of Concession," Economic Inquiry, Western Economic Association International, vol. 47(2), pages 197-205, 04.
  5. Salvador Barbera & Matthew O. Jackson, 2004. "Choosing How to Choose: Self-Stable Majority Rules and Constitutions," The Quarterly Journal of Economics, MIT Press, vol. 119(3), pages 1011-1048, August.
  6. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422, November.
  7. Mike Burkart & Klaus Wallner, 2000. "Club Enlargement: Early Versus Late Admittance," Econometric Society World Congress 2000 Contributed Papers 0253, Econometric Society.
  8. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2010. "Political Selection and Persistence of Bad Governments," The Quarterly Journal of Economics, MIT Press, vol. 125(4), pages 1511-1575, November.
  9. Bruno Strulovici, 2008. "Learning While Voting: Determinants of Collective Experimentation," Economics Series Working Papers 2008-WO8, University of Oxford, Department of Economics.
  10. Jack, William & Lagunoff, Roger, 2006. "Dynamic enfranchisement," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 551-572, May.
  11. Powell, Robert, 2006. "War as a Commitment Problem," International Organization, Cambridge University Press, vol. 60(01), pages 169-203, January.
  12. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2008. "Coalition Formation in Non-Democracies," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 987-1009.
  13. Matthias Messner & Mattias K. Polborn, 2004. "Voting on Majority Rules," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 115-132.
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