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Social Conflict and Gradual Political Succession: An Illustrative Model

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Abstract

This paper studies the evolution of political institutions in the face of conflict. We examine institutional reform in a class of pivotal mechanisms -- institutions that behave as if the resulting policy were determined by a "pivotal" decision maker drawn from the potential population of citizens and who holds full policy-making authority at the time. A rule-of-succession describes the process by which pivotal decision makers in period t + 1 are, themselves, chosen by pivotal decision makers in period t. Two sources of conflict - class conflict, arising from differences in wealth, and ideological conflict, arising from differences in preferences are examined. In each case, we characterize the unique Markov Perfect Equilibrium of the associated dynamic political game, and show that public decision-making authority evolves monotonically downward in wealth and upward in ideological predisposition toward the public good. We then examine rules-of-succession when ideology and wealth exhibit correlation.

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  • William Jack (Georgetown University) and Roger Lagunoff (Georgetown University), 2005. "Social Conflict and Gradual Political Succession: An Illustrative Model," Working Papers gueconwpa~05-05-15, Georgetown University, Department of Economics.
  • Handle: RePEc:geo:guwopa:gueconwpa~05-05-15
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    1. Jack, William & Lagunoff, Roger, 2006. "Dynamic enfranchisement," Journal of Public Economics, Elsevier, pages 551-572.
    2. Justman, Moshe & Gradstein, Mark, 1999. "The Industrial Revolution, Political Transition, and the Subsequent Decline in Inequality in 19th-Century Britain," Explorations in Economic History, Elsevier, vol. 36(2), pages 109-127, April.
    3. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, pages 219-237.
    4. Lagunoff, Roger, 2009. "Dynamic stability and reform of political institutions," Games and Economic Behavior, Elsevier, vol. 67(2), pages 569-583, November.
    5. Barbera, S. & Maschler, M. & Shalev, J., 2001. "Voting for Voters: A Model of Electoral Evolution," Games and Economic Behavior, Elsevier, vol. 37(1), pages 40-78, October.
    6. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, pages 938-963.
    7. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "Minimum Wages and On-the-job Training," NBER Working Papers 7184, National Bureau of Economic Research, Inc.
    8. Roger Lagunoff, 2005. "Markov Equilibrium in Models of Dynamic Endogenous Political Institutions," Game Theory and Information 0501003, EconWPA.
    9. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1167-1199.
    10. Grandmont, Jean-Michel, 1978. "Intermediate Preferences and the Majority Rule," Econometrica, Econometric Society, vol. 46(2), pages 317-330, March.
    11. Roberts, Kevin W. S., 1977. "Voting over income tax schedules," Journal of Public Economics, Elsevier, pages 329-340.
    12. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, pages 938-963.
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    Cited by:

    1. Lagunoff, Roger, 2009. "Dynamic stability and reform of political institutions," Games and Economic Behavior, Elsevier, vol. 67(2), pages 569-583, November.
    2. Jinhui H. Bai & Roger Lagunoff, 2011. "On the Faustian Dynamics of Policy and Political Power," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 17-48.
    3. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2011. "Democratization and Civil Liberties: The Role of Violence During the Transition," Economics Working Paper Series 1108, University of St. Gallen, School of Economics and Political Science.
    4. Angeles, Luis, 2008. "Democratization as a cost-saving device," SIRE Discussion Papers 2008-54, Scottish Institute for Research in Economics (SIRE).
    5. Roger Lagunoff (Georgetown University), 2005. "Markov Equilibrium in Models of Dynamic Endogenous Political Institutions," Working Papers gueconwpa~05-05-07, Georgetown University, Department of Economics.
    6. Cervellati, Matteo & Fortunato, Piergiuseppe & Sunde, Uwe, 2014. "Violence during democratization and the quality of democratic institutions," European Economic Review, Elsevier, vol. 66(C), pages 226-247.
    7. Roger Lagunoff, 2004. "The Dynamic Reform of Political Institutions," Econometric Society 2004 Latin American Meetings 47, Econometric Society.

    More about this item

    Keywords

    Social Conflict; Rule of Succession; Dynamic political game;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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