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An Economic Analysis of Political Meritocracy

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  • Chu, Angus C.
  • Kou, Zonglai
  • Wang, Xilin

Abstract

The political system in China is often referred to as political meritocracy. This study develops a simple model of political economy to explore the strengths and weaknesses of a meritocratic system (in which political meritocrats design economic policies) relative to a democratic system (dominated by the median voter). We find that political meritocrats would choose economic policies that are more conducive to economic activities and lead to higher income but less public goods. Whether the meritocratic or democratic equilibrium achieves a higher level of social welfare depends on the distribution of individuals' abilities. If the ability of the median voter is lower than the mean of the population, then the meritocratic equilibrium may achieve a higher level of social welfare than the democratic equilibrium. In this case, there is a threshold degree of political inclusiveness in the meritocratic system above which political meritocracy dominates democracy in terms of social welfare, and this threshold degree of political inclusiveness is increasing in the ability of the median voter.

Suggested Citation

  • Chu, Angus C. & Kou, Zonglai & Wang, Xilin, 2020. "An Economic Analysis of Political Meritocracy," MPRA Paper 102083, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:102083
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    References listed on IDEAS

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    More about this item

    Keywords

    political meritocracy; democracy; median voter; utilitarianism;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy

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