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A Theory of Civil Conflict and Democracy in Unequal Societies

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  • Tsuyoshi Adachi

    () (Graduate School of Economics, Waseda University)

  • Yasuhiko Nakamura

    () (Graduate School of Economics, Waseda University)

Abstract

This paper examines the endogenous choice between democracy and conflict in a scenario with different social classes in terms of income inequality and with parties representing each of the two social classes. We consider how the change in economic inequality between the poor and rich people affects the sustainability of democracy against conflict and how it impacts the equilibrium levels of tax rate and public expenditure under democracy. We show that the increase in economic inequality destabilizes of democracy since the poor hardly has the incentive to sustain the democracy Further the increase is positively associated with the equilibrium levels of both the tax rate and public expenditure. Therefore, we successfully provide theoretic justification for the fact that sufficiently large economic inequality decreases the possibility of a self-enforcing democracy.

Suggested Citation

  • Tsuyoshi Adachi & Yasuhiko Nakamura, 2008. "A Theory of Civil Conflict and Democracy in Unequal Societies," Economics Bulletin, AccessEcon, vol. 8(2), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-08h10001
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    References listed on IDEAS

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    3. Robinson, James A. & Torvik, Ragnar & Verdier, Thierry, 2006. "Political foundations of the resource curse," Journal of Development Economics, Elsevier, vol. 79(2), pages 447-468, April.
    4. Robinson, James A. & Torvik, Ragnar, 2005. "White elephants," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 197-210, February.
    5. Adam Przeworski, 2005. "Democracy as an equilibrium," Public Choice, Springer, vol. 123(3), pages 253-273, June.
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    Cited by:

    1. Eiji Yamamura, 2014. "Comparing the influence of conflict on the perceptions of rich and poor: testing the hypothesis of Acemoglu and Robinson," ISER Discussion Paper 0911, Institute of Social and Economic Research, Osaka University.

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    More about this item

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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