Social Conflict and Gradual Political Succession: An Illustrative Model
This paper studies the evolution of political institutions in the face of conflict. We examine institutional reform in a class of "pivotal mechanisms"-institutions that behave "as if" the resulting policy were determined by a "pivotal" decision maker drawn from the potential population of citizens and who holds full policy-making authority at the time. A "rule-of-succession" describes the process by which pivotal decision makers in period "t+1" are, themselves, chosen by pivotal decision makers in period "t". Two sources of conflict-class conflict, arising from differences in wealth, and ideological conflict, arising from differences in preferences-are examined. In each case, we characterize the unique Markov-perfect equilibrium of the associated dynamic political game, and show that public decision-making authority evolves monotonically downward in wealth and upward in ideological predisposition toward the public good. We then examine "rules-of-succession" when ideology and wealth exhibit correlation. Copyright The editors of the "Scandinavian Journal of Economics" 2006 .
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Volume (Year): 108 (2006)
Issue (Month): 4 (December)
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