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Political entry, public policies, and the economy

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  • Mulligan, Casey B.
  • Tsui, Kevin K.

Abstract

This paper presents a theory of competition in dictatorships, in which the possible equilibrium political market structures range from pure monopoly (uncontested kleptocracy with high entry barriers) to perfectly competitive (benevolent dictatorship with regular leadership turnover). Leaders compete sequentially and are constrained by the threat of entry, their ability to tax, or both, so that a dictator with no challengers may nonetheless implement policies in the public interest. By focusing on the incentives for political entry, our model helps to classify regimes and to clarify some of the political science debate as to whether political monopoly power is properly measured by the size of political entry barriers or the frequency of leadership turnover. Moreover, we offer economic interpretations of why some dictatorial regimes are uncontested, why there are good and bad dictators, why nondemocratic countries are associated with lower wages, why resource abundant countries tend to be nondemocratic, and how technological change affects political development. Finally, we show how external support of opposition political parties and other policies designed to promote democracy may actually have the unintended consequences of discouraging political competition.

Suggested Citation

  • Mulligan, Casey B. & Tsui, Kevin K., 2015. "Political entry, public policies, and the economy," Research in Economics, Elsevier, vol. 69(3), pages 377-397.
  • Handle: RePEc:eee:reecon:v:69:y:2015:i:3:p:377-397
    DOI: 10.1016/j.rie.2015.06.004
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    1. Adam, Antonis & Delis, Manthos D. & Kammas, Pantelis, 2011. "Are democratic governments more efficient?," European Journal of Political Economy, Elsevier, vol. 27(1), pages 75-86, March.
    2. Mulligan, Casey B. & Tsui, Kevin K., 2015. "Political entry, public policies, and the economy," Research in Economics, Elsevier, vol. 69(3), pages 377-397.
    3. Donna Driscoll & Dennis Halcoussis & Anton D. Lowenberg, 2011. "Economic Sanctions And Culture," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(4), pages 423-448, August.
    4. Matthew Gentzkow & Nathan Petek & Jesse M. Shapiro & Michael Sinkinson, 2015. "Do Newspapers Serve The State? Incumbent Party Influence On The Us Press, 1869–1928," Journal of the European Economic Association, European Economic Association, vol. 13(1), pages 29-61, February.
    5. Daron Acemoglu & James A. Robinson, 2013. "Economics versus Politics: Pitfalls of Policy Advice," Journal of Economic Perspectives, American Economic Association, vol. 27(2), pages 173-192, Spring.
    6. Lagerlöf Nils-Petter, 2012. "A Dynamic Theory of Competence, Loyalty and Stability in Dictatorships," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-39, March.
    7. Bhattacharyya, Sambit & Conradie, Louis & Arezki, Rabah, 2017. "Resource discovery and the politics of fiscal decentralization," Journal of Comparative Economics, Elsevier, vol. 45(2), pages 366-382.
    8. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    9. Bandyopadhyay, Siddhartha & Bhalla, Manaswini & Chatterjee, Kalyan & Roy, Jaideep, 2017. "Strategic dissent in the Hotelling–Downs model with sequential entry and private information," Research in Economics, Elsevier, vol. 71(1), pages 51-66.
    10. Gregorini, Filippo, 2015. "Political geography and income inequalities," Research in Economics, Elsevier, vol. 69(3), pages 439-452.
    11. repec:bla:buecrs:v:70:y:2018:i:1:p:51-63 is not listed on IDEAS
    12. Egorov, Georgy & Sonin, Konstantin, 2015. "The killing game: A theory of non-democratic succession," Research in Economics, Elsevier, vol. 69(3), pages 398-411.
    13. Michael Polemis & Konstantinos Eleftheriou, 2018. "To Regulate Or To Deregulate? The Role Of Downstream Competition In Upstream Monopoly Vertically Linked Markets," Bulletin of Economic Research, Wiley Blackwell, vol. 70(1), pages 51-63, January.
    14. Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
    15. John Anyanwu & Andrew E. O. Erhijakpor, 2013. "Working Paper 184 - Does Oil Wealth Affect Democracy in Africa?," Working Paper Series 988, African Development Bank.

    More about this item

    Keywords

    Political monopoly power; Political entry barriers; Leadership turnover;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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