Economic Development With Endogenous Political Participation

This paper combines two approaches to the relationship between economics and politics. The first, standard in the economic literature, takes political arrangements as exogenous and examines the way in which different political regimes influence economic performance. A second approach, normally followed by political scientists, takes economic performance as exogenous and analyzes the way in which the political structure of society responds to it. I integrate both approaches in a simple model that provides a framework to think about the observed correlations between income per capita and political participation. Extensions to the basic model show the possibility of multiple equilibria, and are used to analyze totalitarianism and the role of urbanization.