IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Political Entry, Public Policies, and the Economy

Listed author(s):
  • Casey B. Mulligan
  • Kevin K. Tsui

This paper presents a theory of competition for political leadership between incumbent leaders and their challengers in which the possible equilibrium political market structures range from pure monopoly (unchallenged dictatorship) to perfectly competitive (ideal democracy). Leaders are constrained by the threat of "entry" or their ability to tax (or both), so that regimes with no challengers may nonetheless implement policies in the public interest. We offer economic interpretations of why democratic countries are associated with higher wages, why resource abundant countries tend to be nondemocratic, and how technological change affects political development. By focusing on the incentives for political entry, we show how trade sanctions and other policies designed to promote democracy may actually have the unintended consequences of discouraging political competition.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w13830.pdf
Download Restriction: no

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13830.

as
in new window

Length:
Date of creation: Mar 2008
Publication status: published as Mulligan, Casey B. & Tsui, Kevin K., 2015. "Political entry, public policies, and the economy," Research in Economics, Elsevier, vol. 69(3), pages 377-397.
Handle: RePEc:nbr:nberwo:13830
Note: IO PE POL
Contact details of provider: Postal:
National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.

Phone: 617-868-3900
Web page: http://www.nber.org
Email:


More information through EDIRC

References listed on IDEAS
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.:

as
in new window


  1. Kendall Todd D. & Tsui Kevin, 2011. "The Economics of the Long Tail," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-20, December.
  2. Konrad, Kai A. & Skaperdas, Stergios, 2007. "Succession rules and leadership rents," Munich Reprints in Economics 22093, University of Munich, Department of Economics.
  3. Baye, Michael R. & Hoppe, Heidrun C., 2003. "The strategic equivalence of rent-seeking, innovation, and patent-race games," Games and Economic Behavior, Elsevier, vol. 44(2), pages 217-226, August.
  4. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
  5. Ling Shen, 2005. "When will a dictator be good?," Bonn Econ Discussion Papers bgse22_2005, University of Bonn, Germany.
  6. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
  7. Daron Acemoglu & Davide Ticchi & Andrea Vindigni, 2008. "A Theory of Military Dictatorships," NBER Working Papers 13915, National Bureau of Economic Research, Inc.
  8. Acemoglu, Daron & Johnson, Simon & Robinson, James A & Yared, Pierre, 2005. "Income and Democracy," CEPR Discussion Papers 5273, C.E.P.R. Discussion Papers.
  9. Fali Huang, 2007. "The Coevolution of Economic and Political Development from Monarchy to Democracy," Development Economics Working Papers 22448, East Asian Bureau of Economic Research.
  10. Roger B. Myerson, 1998. "Theoretical Comparisons of Electoral Systems," Discussion Papers 1261, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Xavier Sala-i-Martin, 2002. "Social security and democracy," Economics Working Papers 621, Department of Economics and Business, Universitat Pompeu Fabra.
  12. Torsten Persson & Guido Tabellini, 2006. "Democracy and Development: The Devil in the Details," CESifo Working Paper Series 1672, CESifo Group Munich.
  13. Persson, Torsten & Roland, Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," CEPR Discussion Papers 1737, C.E.P.R. Discussion Papers.
  14. Austan Goolsbee & Chad Syverson, 2008. "How Do Incumbents Respond to the Threat of Entry? Evidence from the Major Airlines," The Quarterly Journal of Economics, Oxford University Press, vol. 123(4), pages 1611-1633.
  15. Timothy Besley & Torsten Persson & Daniel M. Sturm, 2010. "Political Competition, Policy and Growth: Theory and Evidence from the United States," CEP Discussion Papers dp1009, Centre for Economic Performance, LSE.
  16. Herschel I. Grossman & Suk Jae Noh, 1990. "A Theory Of Kleptocracy With Probabilistic Survival And Reputation," Economics and Politics, Wiley Blackwell, vol. 2(2), pages 157-171, 07.
  17. Marion B. Stewart, 1983. "Noncooperative Oligopoly and Preemptive Innovation without Winner-Take-All," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 681-694.
  18. Hinich, Melvin J., 1977. "Equilibrium in spatial voting: The median voter result is an artifact," Journal of Economic Theory, Elsevier, vol. 16(2), pages 208-219, December.
  19. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2010. "Political Selection and Persistence of Bad Governments," The Quarterly Journal of Economics, Oxford University Press, vol. 125(4), pages 1511-1575.
  20. Michele Polo, "undated". "Electoral competition and political rents," Working Papers 144, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  21. George Stigler, 1972. "Economic competition and political competition," Public Choice, Springer, vol. 13(1), pages 91-106, September.
  22. Tim Besley & Stephen Coate, "undated". ""An Economic Model of Representative Democracy''," CARESS Working Papres 95-02, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  23. Sambit Bhattacharyya & Roland Hodler, 2008. "Natural Resources, Democracy and Corruption," Department of Economics - Working Papers Series 1047, The University of Melbourne.
  24. Mulligan, Casey B. & Tsui, Kevin K., 2015. "Political entry, public policies, and the economy," Research in Economics, Elsevier, vol. 69(3), pages 377-397.
  25. Niskanen, William A, 1997. "Autocratic, Democratic, and Optimal Government," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 464-479, July.
  26. Herschel I. Grossman, 2000. "The state: Agent or proprietor?," Economics of Governance, Springer, vol. 1(1), pages 3-11, 03.
  27. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
  28. Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
  29. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
  30. Reinganum, Jennifer R., "undated". "Innovation and Industry Evolution," Working Papers 426, California Institute of Technology, Division of the Humanities and Social Sciences.
  31. Frederick Van der Ploeg, 2010. "Natural Resources: Curse or Blessing?," CESifo Working Paper Series 3125, CESifo Group Munich.
  32. Simeon Djankov & Caralee McLiesh & Tatiana Nenova & Andrei Shleifer, 2001. "Who Owns the Media?," Harvard Institute of Economic Research Working Papers 1919, Harvard - Institute of Economic Research.
  33. Egorov, Georgy & Sonin, Konstantin, 2015. "The killing game: A theory of non-democratic succession," Research in Economics, Elsevier, vol. 69(3), pages 398-411.
  34. Gallego, M. & Pitchik, C., 2004. "An economic theory of leadership turnover," Journal of Public Economics, Elsevier, vol. 88(12), pages 2361-2382, December.
  35. Douglass C North & John Joseph Wallis & Barry R. Weingast, 2006. "A Conceptual Framework for Interpreting Recorded Human History," NBER Working Papers 12795, National Bureau of Economic Research, Inc.
  36. Przeworski, Adam, 2009. "Conquered or Granted? A History of Suffrage Extensions," British Journal of Political Science, Cambridge University Press, vol. 39(02), pages 291-321, April.
  37. Seema Jayachandran, 2004. "Odious Debt," UCLA Economics Online Papers 298, UCLA Department of Economics.
  38. Dougan, William R & Snyder, James M, 1993. "Are Rents Fully Dissipated?," Public Choice, Springer, vol. 77(4), pages 793-813, December.
  39. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908 Elsevier.
  40. Casey B. Mulligan & Xavier Sala-i-Martin & Ricard Gil, 2003. "Do Democracies Have Different Public Policies than Nondemocracies?," NBER Working Papers 10040, National Bureau of Economic Research, Inc.
  41. 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.
  42. Grossman, Herschel I. & Noh, Suk Jae, 1994. "Proprietary public finance and economic welfare," Journal of Public Economics, Elsevier, vol. 53(2), pages 187-204, February.
  43. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
  44. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
  45. José Cheibub & Jennifer Gandhi & James Vreeland, 2010. "Democracy and dictatorship revisited," Public Choice, Springer, vol. 143(1), pages 67-101, April.
  46. Wintrobe,Ronald, 2000. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521794497, December.
  47. Daron Acemoglu & James A. Robinson & Thierry Verdier, 2004. "Alfred Marshall Lecture: Kleptocracy and Divide-and-Rule: A Model of Personal Rule," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 162-192, 04/05.
  48. Dani Rodrik, 1998. "Democracies Pay Higher Wages," NBER Working Papers 6364, National Bureau of Economic Research, Inc.
  49. Casey B Mulligan, 1999. "Gerontocracy, Retirement, and Social Security," University of Chicago - George G. Stigler Center for Study of Economy and State 154, Chicago - Center for Study of Economy and State.
  50. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(03), pages 379-414, June.
  51. Fali Huang, 2006. "The Coevolution of Economic and Political Development," Development Economics Working Papers 22442, East Asian Bureau of Economic Research.
  52. Rabah Arezki & Frederick van der Ploeg, 2011. "Do Natural Resources Depress Income Per Capita?," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 504-521, 08.
  53. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-293, June.
  54. Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Economics Working Papers 870, Department of Economics and Business, Universitat Pompeu Fabra.
  55. Aidt, Toke & Dutta, Jayasri & Sena, Vania, 2008. "Governance regimes, corruption and growth: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 195-220, June.
  56. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422, December.
  57. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 395-410.
  58. Casey B. Mulligan & Kevin K. Tsui, 2006. "Political Competitiveness," NBER Working Papers 12653, National Bureau of Economic Research, Inc.
  59. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-921, September.
  60. Kevin K. Tsui, 2010. "Resource Curse, Political Entry, And Deadweight Costs," Economics and Politics, Wiley Blackwell, vol. 22(3), pages 471-497, November.
  61. Friedman, Daniel & Wittman, Donald, 1995. "Why voters vote for incumbents but against incumbency: A rational choice explanation," Journal of Public Economics, Elsevier, vol. 57(1), pages 67-83, May.
  62. ., 2006. "Democracy and Development," Chapters, in: The Elgar Companion to Development Studies, chapter 21 Edward Elgar Publishing.
  63. Roger B. Myerson, 1991. "Effectiveness of Electoral Systems for Reducing Government Corruption: A Game-Theoretic Analysis," Discussion Papers 956, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  64. Alessandro Lizzeri & Nicola Persico, "undated". ""The Provision of Public Goods Under Alternative Electoral Incentives''," CARESS Working Papres 98-08, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  65. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
  66. Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, Oxford University Press, vol. 94(2), pages 429-436.
  67. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, vol. 91(4), pages 938-963, September.
  68. John Lott, 1986. "Brand names and barriers to entry in political markets," Public Choice, Springer, vol. 51(1), pages 87-92, January.
  69. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150-150, March.
  70. Anca Cotet & Kevin K. Tsui, 2010. "Oil and Conflict: What Does the Cross-Country Evidence Really Show?," Working Papers 201002, Ball State University, Department of Economics, revised Mar 2010.
  71. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
  72. Steven J. Davis & Kevin M. Murphy & Robert H. Topel, 2001. "Entry, Pricing and Product Design in an Initially Monopolized Market," NBER Working Papers 8547, National Bureau of Economic Research, Inc.
  73. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2008. "Coalition Formation in Non-Democracies," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 987-1009.
  74. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
  75. Federico Etro, 2004. "Innovation by leaders," Economic Journal, Royal Economic Society, vol. 114(495), pages 281-303, 04.
  76. Timothy Besley & Torsten Persson, 2011. "The Logic of Political Violence," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1411-1445.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:13830. 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: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.