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Particularism, dominant minorities and institutional change

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  • Raouf Boucekkine

    () (Aix-Marseille University, CNRS, EHESS, Centrale Marseille, IMéRA and AMSE)

  • Rodolphe Desbordes

    () (SKEMA Business School-UCA)

  • Paolo Melindi-Ghidi

    () (EconomiX, Paris-Nanterre University & AMSE Aix-Marseille University, France)

Abstract

We develop a theory of institutional transition from dictatorship to minority dominant-based regimes. We depart from the standard political transition framework à la Acemoglu-Robinson in four essential ways: (i) population is heterogeneous, there is a minority/majority split, heterogeneity being generic, simply reflecting subgroup size; (ii) there is no median voter in the post-dictatorship period, political and economic competition is favorable to the minority (fiscal particularism); (iii) (windfall) resources are introduced, and (iv) we distinguish between labor income and resources, and labor supply is endogenous. We first document empirically fiscal particularism, its connection with resource endowment, and the impact of both on revolutionary bursts. Second, we construct a full-fledged model incorporating the four characteristics outlined above. We show, among others, that polarization is a sufficient condition for revolutions, while resource rents are not: they do matter though when polarization is low. In agreement with our empirical facts, countries engaging in revolutions tend to be slightly less resource-rich than other countries. We also outline the interplay between resource rents, polarization and labor market conditions at the dawn of institutional change. Our theory is appropriate to understand the institutional dynamics in highly homogeneous resource-rich countries, which after post-independence autocratic regimes, turn to be dominated by minorities, Algeria being the paradigmatic case.

Suggested Citation

  • Raouf Boucekkine & Rodolphe Desbordes & Paolo Melindi-Ghidi, 2019. "Particularism, dominant minorities and institutional change," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2019017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2019017
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    References listed on IDEAS

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    Cited by:

    1. Boucekkine, Raouf & Piacquadio, Paolo G. & Prieur, Fabien, 2019. "A Lipsetian theory of voluntary power handover," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 269-291.

    More about this item

    Keywords

    Political transition; minority/majority; fiscal particularism; dominant minority; resources; labor market;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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