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Growth-Friendly Dictatorships

  • Giacomo De Luca

    ()

    (University of York, United Kingdom)

  • Anastasia Litina

    ()

    (CREA, University of Luxembourg)

  • Petros G. Sekeris

    ()

    (FNRS and CRED, University of Namur, Belgium)

In this paper we show that in highly unequal societies, different societal groups may support a rent-seeking dicator serving their interests better than the median voter in a democratic regime. Importantly, it is the stakes of dictator in the economy, in the form of capital ownership, that drives the support of individuals. In particular, in highly societies ruled by a capital-rich dictator endowed with the power to tax and appropriate at will, the elites support dictatorial policies that generate higher growth rates than the ones obtained under democracy. Such support arises despite the total absence of checks and balances on the dictator.

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Paper provided by Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 12-13.

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Date of creation: 2012
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Handle: RePEc:luc:wpaper:12-13
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