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

  • Raouf Boucekkine

    ()

    (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université, IRES-CORE - UCL - Université Catholique de Louvain)

  • Fabien Prieur

    ()

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - CNRS - Institut national de la recherche agronomique (INRA) - UM1 - Université Montpellier 1 - Centre international de hautes études agronomiques méditerranéennes [CIHEAM])

  • Klarizze Puzon

    ()

    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - CNRS - Institut national de la recherche agronomique (INRA) - UM1 - Université Montpellier 1 - Centre international de hautes études agronomiques méditerranéennes [CIHEAM])

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.

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Date of creation: Mar 2013
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Handle: RePEc:hal:wpaper:halshs-00801961
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  1. Raouf BOUCEKKINE & Rafik BOUKLIA-HASSANE, 2011. "Rente, corruption et violence : l’émergence d’un ordre nouveau dans les pays arabes ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 92, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
  3. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, 08.
  4. Francesco Caselli & Tom Cunningham, 2009. "Leader Behavior and the Natural Resource Curse," CEP Discussion Papers dp0913, Centre for Economic Performance, LSE.
  5. Linster, Bruce G, 1994. " Cooperative Rent-Seeking," Public Choice, Springer, vol. 81(1-2), pages 23-34, October.
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