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The Dynamics of Lobbying under Uncertainty: On Political Liberalization in Arab Countries

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Abstract

We consider a framework à la Wirl (1994) where political liberalization is the outcome of a lobbying differential game between a conservative elite and a reformist group, the former player pushing against political liberalization in opposition to the latter. In contrast to the benchmark model, we introduce uncertainty. We consider the typical case of an Arab oil exporter country where oil rents are fiercely controlled by the conservative elite. We assume that the higher the oil rents, the more reluctant to political liberalization the elite is. Two states of nature are considered (high vs low resource rents). We then compute the Market-perfect equilibria of the corresponding piecewise deterministic differential game. It is shown that introducing uncertainty in this manner increases the set of strategies compared to Wirl's original setting. In particular, it is shown that the cost of lobbying might be significantly increased under uncertainty with respect to the benchmark. This ultimately highlights some specificities of the political liberalization at stake in Arab countries and the associated risks.

Suggested Citation

  • Raouf Boucekkine & Fabien Prieur & Klarizze Puzon, 2013. "The Dynamics of Lobbying under Uncertainty: On Political Liberalization in Arab Countries," AMSE Working Papers 1317, Aix-Marseille School of Economics, Marseille, France.
  • Handle: RePEc:aim:wpaimx:1317
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    References listed on IDEAS

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    1. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, pages 847-859.
    2. Raouf BOUCEKKINE & Rafik BOUKLIA-HASSANE, 2011. "Rente, corruption et violence : l’émergence d’un ordre nouveau dans les pays arabes ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 92, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    4. Linster, Bruce G, 1994. "Cooperative Rent-Seeking," Public Choice, Springer, vol. 81(1-2), pages 23-34, October.
    5. Francesco Caselli & Tom Cunningham, 2009. "Leader behaviour and the natural resource curse," Oxford Economic Papers, Oxford University Press, pages 628-650.
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    Cited by:

    1. Driouchi, Ahmed, 2014. "Testing of Natural Resources as Blessing or Curse to the Knowledge Economy in Arab Countries," MPRA Paper 58598, University Library of Munich, Germany.
    2. Raouf Boucekkine & Fabien Prieur & Benteng Zou, 2015. "Symmetric vs Asymmetric Equilibria and Stochastic Stability in a Dynamic Game of Legislative Lobbying," AMSE Working Papers 1531, Aix-Marseille School of Economics, Marseille, France, revised Jan 2018.
    3. Raouf Boucekkine & Fabien Prieur & Benteng Zou, 2015. "Institutional dynamics under revenue volatility and revenue-dependent lobbying power: A stochastic differential game approach," CREA Discussion Paper Series 15-08, Center for Research in Economic Analysis, University of Luxembourg.

    More about this item

    Keywords

    Rent-seeking; lobbying; natural resources; Arab countries; piecewise deterministic differential games;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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