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Inefficient Predation, Information, and Contagious Institutional Change

  • Paul Maarek


    (THEMA, Universite de Cergy-Pontoise)

  • Michael Dorsch


    (The American University of Paris)

This paper presents an agency theory of revolutionary political transitions from autocracy to democracy. We model authoritarian economic policy as the equilibrium outcome of a repeated game between an elite ruling class and a disenfranchised working class, in which workers have imperfect information about the elite's policy choice and the economy's productive capacity. We characterize the conditions under which, in equilibrium, (i) the elite will set inefficient economic institutions under the threat of revolution, (ii) information shocks can catalyze democratic revolutions that may be contagious among similar countries, and (iii) democracy can be consolidated following a political transition.

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Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2012-32.

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Date of creation: 2012
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Handle: RePEc:ema:worpap:2012-32
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  1. Djankov, Simeon & La Porta, Rafael & López-de-Silanes, Florencio & Shleifer, Andrei, 2001. "The Regulation of Entry," CEPR Discussion Papers 2953, C.E.P.R. Discussion Papers.
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  15. Timur Kuran, 1989. "Sparks and prairie fires: A theory of unanticipated political revolution," Public Choice, Springer, vol. 61(1), pages 41-74, April.
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  17. Chassang, Sylvain & Miquel, Gerard Padró i, 2009. "Economic Shocks and Civil War," Quarterly Journal of Political Science, now publishers, vol. 4(3), pages 211-228, October.
  18. Lohmann, Susanne, 1994. "Information Aggregation through Costly Political Action," American Economic Review, American Economic Association, vol. 84(3), pages 518-30, June.
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