IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/18165.html
   My bibliography  Save this paper

The Dynastic Transmission of Power, Exit Options and the Coevolution of Rent-seeking Elites

Author

Listed:
  • Verdier, Thierry
  • Silve, Arthur

Abstract

We introduce a dynamic model that investigates the persistence and evolution of elite-dominated societies, where inherited political capital determines one’s social standing. Our analysis highlights the critical role of the distribution of exit options in the evolution of political inclusiveness across generations. An elite comparatively more mobile than the masses generally entrenches a politically stratified society, whereas a more widespread distribution of exit options can encourage inclusiveness. Under certain conditions differential mobility may still induce political inclusiveness across generations. Exit options across different political entities lead to a joint evolution of local power structures.

Suggested Citation

  • Verdier, Thierry & Silve, Arthur, 2023. "The Dynastic Transmission of Power, Exit Options and the Coevolution of Rent-seeking Elites," CEPR Discussion Papers 18165, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18165
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP18165
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fiva, Jon H. & Smith, Daniel M., 2018. "Political Dynasties and the Incumbency Advantage in Party-Centered Environments," American Political Science Review, Cambridge University Press, vol. 112(3), pages 706-712, August.
    2. Ghosal, Sayantan & Proto, Eugenio, 2009. "Democracy, collective action and intra-elite conflict," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1078-1089, October.
    3. Edwards, Jeremy & Keen, Michael, 1996. "Tax competition and Leviathan," European Economic Review, Elsevier, vol. 40(1), pages 113-134, January.
    4. Querubin, Pablo, 2016. "Family and Politics: Dynastic Persistence in the Philippines," Quarterly Journal of Political Science, now publishers, vol. 11(2), pages 151-181, July.
    5. Brülhart, Marius & Jametti, Mario, 2019. "Does tax competition tame the Leviathan?," Journal of Public Economics, Elsevier, vol. 177(C), pages 1-1.
    6. Chatterjee, Arpita, 2017. "Endogenous comparative advantage, gains from trade and symmetry-breaking," Journal of International Economics, Elsevier, vol. 109(C), pages 102-115.
    7. Robert H. Bates & Da-Hsiang Donald Lien, 1985. "A Note on Taxation, Development, and Representative Government," Politics & Society, , vol. 14(1), pages 53-70, March.
    8. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, vol. 91(4), pages 938-963, September.
    9. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922.
    10. Marianna Belloc & Samuel Bowles, 2017. "Persistence and Change in Culture and Institutions under Autarchy, Trade, and Factor Mobility," American Economic Journal: Microeconomics, American Economic Association, vol. 9(4), pages 245-276, November.
    11. Serguey Braguinsky & Roger Myerson, 2007. "Capital and growth with oligarchic property rights," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(4), pages 676-704, October.
    12. Challe, Edouard & Lopez, Jose Ignacio & Mengus, Eric, 2019. "Institutional quality and capital inflows: Theory and evidence," Journal of International Money and Finance, Elsevier, vol. 96(C), pages 168-191.
    13. Dong-Hyeon Kim & Joyce Hsieh & Shu-Chin Lin, 2021. "Financial liberalization, political institutions, and income inequality," Empirical Economics, Springer, vol. 60(3), pages 1245-1281, March.
    14. Yang, Hongyan, 2018. "Income redistribution and public goods provision under tax competition," Journal of Urban Economics, Elsevier, vol. 104(C), pages 94-103.
    15. Markus Alzer & Ramin Dadasov, 2013. "Financial Liberalization and Institutional Development," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 424-452, November.
    16. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    17. Demir, Firat, 2016. "Effects of FDI Flows on Institutional Development: Does It Matter Where the Investors are from?," World Development, Elsevier, vol. 78(C), pages 341-359.
    18. Martín A. Rossi, 2017. "Self‐perpetuation of Political Power," Economic Journal, Royal Economic Society, vol. 127(605), pages 455-473, October.
    19. Haggard, Stephan & Kaufman, Robert R., 2012. "Inequality and Regime Change: Democratic Transitions and the Stability of Democratic Rule," American Political Science Review, Cambridge University Press, vol. 106(3), pages 495-516, August.
    20. Daron Acemoglu, 2006. "A Simple Model of Inefficient Institutions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 515-546, December.
    21. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422.
    22. Alessandro Lizzeri & Nicola Persico, 2004. "Why did the Elites Extend the Suffrage? Democracy and the Scope of Government, with an Application to Britain's "Age of Reform"," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 707-765.
    23. Daron Acemoglu & James A. Robinson & Thierry Verdier, 2017. "Asymmetric Growth and Institutions in an Interdependent World," Journal of Political Economy, University of Chicago Press, vol. 125(5), pages 1245-1305.
    24. Simmons, Beth A. & Dobbin, Frank & Garrett, Geoffrey, 2006. "Introduction: The International Diffusion of Liberalism," International Organization, Cambridge University Press, vol. 60(4), pages 781-810, October.
    25. George R. Zodrow & Peter Mieszkowski, 2019. "Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 17, pages 525-542, World Scientific Publishing Co. Pte. Ltd..
    26. Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
    27. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    28. Ades, A. & Verdier, T., 1996. "The Rise and Fall of Elites: A Theory of Economic Development and Social Polarization in Rent-Seeking Societies," DELTA Working Papers 96-13, DELTA (Ecole normale supérieure).
    29. Dewan, Torun & Shepsle, Kenneth A, 2008. "Recent Economic Perspectives on Political Economy, Part I," British Journal of Political Science, Cambridge University Press, vol. 38(2), pages 363-382, April.
    30. Toshihiro Ihori & C. Yang, 2012. "Laffer paradox, Leviathan, and political contest," Public Choice, Springer, vol. 151(1), pages 137-148, April.
    31. Warren, Mark E., 2011. "Voting with Your Feet: Exit-based Empowerment in Democratic Theory," American Political Science Review, Cambridge University Press, vol. 105(4), pages 683-701, November.
    32. Laband, David N & Lentz, Bernard F, 1985. "Favorite Sons: Intergenerational Wealth Transfers among Politicians," Economic Inquiry, Western Economic Association International, vol. 23(3), pages 395-414, July.
    33. Benny Geys & Daniel M. Smith, 2017. "Political Dynasties in Democracies: Causes, Consequences and Remaining Puzzles," Economic Journal, Royal Economic Society, vol. 127(605), pages 446-454, October.
    34. Beja Jr, Edsel & Mendoza, Ronald U. & Venida, Victor S. & Yap, David B., 2012. "Inequality in democracy: Insights from an empirical analysis of political dynasties in the 15th Philippine Congress," MPRA Paper 40104, University Library of Munich, Germany.
    35. Wilson, John Douglas, 1987. "Trade, Capital Mobility, and Tax Competition," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 835-856, August.
    36. Benny Geys & Daniel M. Smith, 2017. "Political Dynasties in Democracies: Causes, Consequences and Remaining Puzzles," Economic Journal, Royal Economic Society, vol. 127(605), pages 446-454, October.
    37. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
    38. Ernesto Dal Bó & Frederico Finan, 2018. "Progress and Perspectives in the Study of Political Selection," NBER Working Papers 24783, National Bureau of Economic Research, Inc.
    39. Dewan, Torun & Shepsle, Kenneth A, 2008. "Recent Economic Perspectives on Political Economy, Part II," British Journal of Political Science, Cambridge University Press, vol. 38(3), pages 543-564, July.
    40. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gaëtan Nicodème, 2006. "Corporate tax competition and coordination in the European Union: What do we know? Where do we stand?," European Economy - Economic Papers 2008 - 2015 250, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Baskaran, Thushyanthan & Lopes da Fonseca, Mariana, 2013. "The economics and empirics of tax competition: A survey," University of Göttingen Working Papers in Economics 163, University of Goettingen, Department of Economics.
    3. Krishanu Karmakar & Jorge Martinez-Vazquez, 2014. "Fiscal Competition versus Fiscal Harmonization: A Review of the Arguments," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1431, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. Zodrow, George R, 2003. "Tax Competition and Tax Coordination in the European Union," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(6), pages 651-671, November.
    5. James Alm & H. Spencer Banzhaf, 2012. "Designing Economic Instruments For The Environment In A Decentralized Fiscal System," Journal of Economic Surveys, Wiley Blackwell, vol. 26(2), pages 177-202, April.
    6. Zhang, Junfu, 2011. "Interjurisdictional competition for FDI: The case of China's "development zone fever"," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 145-159, March.
    7. Munongo, Simon & Akanbi, Olusegun Ayo & Robinson, Zurika, 2017. "Do tax incentives matter for investment? A literature review," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 13(2).
    8. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
    9. Zissimos, Ben & Wooders, Myrna, 2005. "Relaxing Tax Competition through Public Good Differentiation," Economic Research Papers 269630, University of Warwick - Department of Economics.
    10. Lars Feld, 2014. "James Buchanan’s theory of federalism: from fiscal equity to the ideal political order," Constitutional Political Economy, Springer, vol. 25(3), pages 231-252, September.
    11. Boadway, Robin & Tremblay, Jean-François, 2012. "Reassessment of the Tiebout model," Journal of Public Economics, Elsevier, vol. 96(11), pages 1063-1078.
    12. Eckhard Janeba & Guttorm Schjelderup, 2002. "Why Europe Should Love Tax Competition - and the U.S. Even More So," NBER Working Papers 9334, National Bureau of Economic Research, Inc.
    13. Maksym Ivanyna, 2008. "Tax competition and governmental efficiency: Theory and evidence," Working Papers 059, Bavarian Graduate Program in Economics (BGPE).
    14. Eckhard Janeba & Guttorm Schjelderup, 2009. "The Welfare Effects of Tax Competition Reconsidered: Politicians and Political Institutions," Economic Journal, Royal Economic Society, vol. 119(539), pages 1143-1161, July.
    15. Baskaran, Thushyanthan, 2013. "Identifying local tax mimicking: Administrative borders and a policy reform," University of Göttingen Working Papers in Economics 157, University of Goettingen, Department of Economics.
    16. Marceau, Nicolas, 2008. "La concurrence entre gouvernements est-elle bénéfique?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 84(4), pages 365-390, Décembre.
    17. Joan Costa-Font & Filipe De-Albuquerque & Hristos Doucouliagos, 2014. "Do jurisdictions compete on taxes? A meta-regression analysis," Public Choice, Springer, vol. 161(3), pages 451-470, December.
    18. Baskaran, Thushyanthan, 2014. "Identifying local tax mimicking with administrative borders and a policy reform," Journal of Public Economics, Elsevier, vol. 118(C), pages 41-51.
    19. Wallace E. Oates & Wallace E. Oates, 2004. "Fiscal Competition and European Union: Contrasting Perspectives," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 10, pages 182-194, Edward Elgar Publishing.
    20. Hernández-Murillo, Rubén, 2019. "Interjurisdictional competition with adverse selection," Journal of Public Economics, Elsevier, vol. 173(C), pages 85-95.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:18165. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.