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Public Sector Capital and the Transition from Dictatorship to Democracy

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  • Christopher J. Ellis
  • John Fender

Abstract

A model where a dictator decides on both the level of public-sector capital and whether to democratize is constructed. Under dictatorship the labor market is monopsonistic; democratization involves instituting a competitive labor market. Workers sometimes have a credible threat of revolution and this may affect the dictator’s investment decision; it may also induce democratization. The possibility of a “political development trap”, where the dictator stifles development to stay in power, emerges. The model is used, inter alia, to explain the effects of the 1832 Reform Act in the UK and the worldwide positive correlation between income and democracy.

Suggested Citation

  • Christopher J. Ellis & John Fender, 2007. "Public Sector Capital and the Transition from Dictatorship to Democracy," Discussion Papers 07-14, Department of Economics, University of Birmingham.
  • Handle: RePEc:bir:birmec:07-14
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    Cited by:

    1. Christopher J Ellis & John Fender, 2010. "Information Aggregation, Growth and Franchise Extension with Applications to Female Enfranchisement and Inequality," Discussion Papers 10-27, Department of Economics, University of Birmingham.
    2. Thampanishvong Kannika, 2012. "Provision of Public Goods with the Presence of Inter-Class Conflicts," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(1), pages 1-29, April.
    3. Christopher J. Ellis & John Fender, 2008. "Democratic Errors," University of Oregon Economics Department Working Papers 2008-2, University of Oregon Economics Department.
    4. Christopher Ellis & John Fender, 2016. "Information Aggregation, Growth, And Franchise Extension With Applications To Female Enfranchisement And Inequality," Bulletin of Economic Research, Wiley Blackwell, vol. 68(3), pages 239-267, April.
    5. Mehdi Shadmehr & Peter Haschke, 2016. "Youth, Revolution, And Repression," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 778-793, April.

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    More about this item

    Keywords

    Democracy; dictatorship; public sector capital; franchise extension; revolution;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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