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The Dynamics of Lobbying under Uncertainty: On Political Liberalization in Arab Countries

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  • Raouf Boucekkine

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - École Centrale de Marseille - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université, IRES-CORE - UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Fabien Prieur

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Klarizze Puzon

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

Abstract

We consider a framework à la Wirl (1994) where political liberalization is the outcome of a lobbying differential game between a conservative elite and a reformist group, the former player pushing against political liberalization in opposition to the latter. In contrast to the benchmark model, we introduce uncertainty. We consider the typical case of an Arab oil exporter country where oil rents are fiercely controlled by the conservative elite. We assume that the higher the oil rents, the more reluctant to political liberalization the elite is. Two states of nature are considered (high vs low resource rents). We then compute the Market-perfect equilibria of the corresponding piecewise deterministic differential game. It is shown that introducing uncertainty in this manner increases the set of strategies compared to Wirl's original setting. In particular, it is shown that the cost of lobbying might be significantly increased under uncertainty with respect to the benchmark. This ultimately highlights some specificities of the political liberalization at stake in Arab countries and the associated risks.

Suggested Citation

  • Raouf Boucekkine & Fabien Prieur & Klarizze Puzon, 2013. "The Dynamics of Lobbying under Uncertainty: On Political Liberalization in Arab Countries," Working Papers halshs-00801961, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00801961
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    References listed on IDEAS

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    1. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
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    4. Linster, Bruce G, 1994. "Cooperative Rent-Seeking," Public Choice, Springer, vol. 81(1-2), pages 23-34, October.
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    Cited by:

    1. Driouchi, Ahmed, 2014. "Testing of Natural Resources as Blessing or Curse to the Knowledge Economy in Arab Countries," MPRA Paper 58598, University Library of Munich, Germany.
    2. Raouf Boucekkine & Fabien Prieur & Benteng Zou, 2015. "Institutional dynamics under revenue volatility and revenue-dependent lobbying power: A stochastic differential game approach," DEM Discussion Paper Series 15-08, Department of Economics at the University of Luxembourg.
    3. Raouf Boucekkine & Fabien Prieur & Benteng Zou, 2015. "Symmetric vs Asymmetric Equilibria and Stochastic Stability in a Dynamic Game of Legislative Lobbying," AMSE Working Papers 1531, Aix-Marseille School of Economics, France, revised Jan 2018.
    4. Raoul Bouccekine & Fabien Prieur & Weihua Ruan & Benteng Zou, 2021. "Uncertainty-driven symmetry-breaking and stochastic stability in a generic differential game of lobbying," DEM Discussion Paper Series 21-10, Department of Economics at the University of Luxembourg.

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    More about this item

    Keywords

    Rent-seeking; lobbying; natural resources; Arab countries; piecewise deterministic differential games;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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