Workshops or Barracks? Productive versus Enforcive Investment and Economic Performance
For many countries in the world today and for much of history, investment in ordinary productive capital has been overshadowed by investment in enforcive capital: castles and siege machines; tanks, missiles and army barracks. We introduce a dynamic model which allows for investment in the latter form of capital, in which competing groups contest output through their holdings of enforcive capital. We show how investment in productive capital declines in relation to enforcive investment as the number of competing groups increases, and how this leads to a decline in steady-state output and welfare.
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|Date of creation:||1998|
|Contact details of provider:|| Postal: UNIVERSITY OF CALIFORNIA IRVINE, SCHOOL OF SOCIAL SCIENCES, IRVINECALIFORNIA 91717 U.S.A.|