Why are Rich Countries more Politically Cohesive?
We document empirically that rich countries are more politically cohesive than poorer countries. In order to explain this regularity, we provide a model where political cohesion is linked to the emergence of a fully functioning market economy. Without market exchange, the welfare of inherently selfish individuals will be mutually independent. As a result, political negotiations, echoing the preferences of the citizens of society, will be dog-eat-dog in nature. Whoever has greater bargaining power will be willing to make decisions that enhance the productivity of his supporters at the expense of other groups in society. If the gains from specialization become sufficiently large, however, a market economy will emerge. From being essentially non-cohesive under self-sufficiency, the political decision making process becomes cohesive in the market economy, as the welfare of individuals will be mutually interdependent due to the exchange of goods. We refer to this latter state as “capitalist cohesion”.
|Date of creation:||Oct 2009|
|Contact details of provider:|| Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark|
Phone: (+45) 35 32 30 10
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oded Galor & Omer Moav, 2000.
"Das Human Kapital,"
2000-17, Brown University, Department of Economics.
- Alberto Alesina & Sule Ozler & Nouriel Roubini & Phillip Swagel, 1992.
"Political Instability and Economic Growth,"
NBER Working Papers
4173, National Bureau of Economic Research, Inc.
- Olson, Mancur, 1963. "Rapid Growth as a Destabilizing Force," The Journal of Economic History, Cambridge University Press, vol. 23(04), pages 529-552, December.
- Oded Galor & Omer Moav, 2006.
"Das Human-Kapital: A Theory of the Demise of the Class Structure,"
Review of Economic Studies,
Oxford University Press, vol. 73(1), pages 85-117.
- Oded Galor & Omer Moav, 2004. "Das Human Kapital: A Theory of the Demise of the Class Structure," GE, Growth, Math methods 0410003, EconWPA.
- Hans-Joachim Voth, 1997.
"Time and Work in Eighteenth-Century London,"
Oxford University Economic and Social History Series
_021, Economics Group, Nuffield College, University of Oxford.
- Oded Galor & Omar Moav & Dietrich Vollrath, 2006.
"Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions, and the Great Divergence,"
DEGIT Conference Papers
c011_001, DEGIT, Dynamics, Economic Growth, and International Trade.
- Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
- Galor, Oded & Moav, Omer & Vollrath, Dietrich, 2008. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions and the Great Divergence," CEPR Discussion Papers 6751, C.E.P.R. Discussion Papers.
- Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
- de Vries, Jan, 1994. "The Industrial Revolution and the Industrious Revolution," The Journal of Economic History, Cambridge University Press, vol. 54(02), pages 249-270, June.
- Clark, Gregory & Werf, Ysbrand Van Der, 1998. "Work in Progress? The Industrious Revolution," The Journal of Economic History, Cambridge University Press, vol. 58(03), pages 830-843, September.
- Robert J. Barro, 1989.
"Economic Growth in a Cross Section of Countries,"
NBER Working Papers
3120, National Bureau of Economic Research, Inc.
- Alberto Alesina & Roberto Perotti, 1993.
"Income Distribution, Political Instability, and Investment,"
NBER Working Papers
4486, National Bureau of Economic Research, Inc.
- Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
- Olsson, Ola, 2007.
Journal of Development Economics,
Elsevier, vol. 82(2), pages 267-286, March.
- Acemoglu,Daron & Robinson,James A., 2009.
"Economic Origins of Dictatorship and Democracy,"
Cambridge University Press, number 9780521671422, May.
- Acemoglu, Daron & Robinson, James A, 1998.
"Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective,"
CEPR Discussion Papers
1797, C.E.P.R. Discussion Papers.
- 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.
- Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
- William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423.
- Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-1288, December.
- John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," Harvard Institute of Economic Research Working Papers 1856, Harvard - Institute of Economic Research.
- John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:kud:kuiedp:0923. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann)
If references are entirely missing, you can add them using this form.