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Centralized institutions and cascades

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  • Rubin, Jared

Abstract

Why do sudden and massive social, economic, and political changes occur when and where they do? Are there institutional preconditions that encourage such changes when present and discourage such changes when absent? I employ a general model which suggests that cascades which induce massive equilibrium changes are more likely to occur in regimes with centralized coercive power, defined as the ability to impose more than one type of sanction (economic, legal, political, social, or religious). Centralized authorities are better able to suppress subversive actions when external shocks are small, as citizens have little incentive to incur numerous types of sanctions. However, citizens are also more likely to lie about their internal preferences in such regimes (e.g., falsely declare loyalty to an oppressive government), entailing that large shocks are more likely to trigger a cascade when authority is centralized. The model is applied to the severity of protests that followed austerity measures taken in developing nations since the 1970s.

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  • Rubin, Jared, 2011. "Centralized institutions and cascades," MPRA Paper 32364, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:32364
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    Cited by:

    1. Moti Michaeli & Daniel Spiro, "undated". "The dynamics of revolutions," Working Papers WP2017/8, University of Haifa, Department of Economics.
    2. Jared Rubin, 2014. "Printing and Protestants: An Empirical Test of the Role of Printing in the Reformation," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 270-286, May.
    3. Greif, Avner & Tadelis, Steven, 2010. "A theory of moral persistence: Crypto-morality and political legitimacy," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 229-244, September.
    4. Michaeli, Moti & Spiro, Daniel, 2014. "Skewed Norms under Peer Pressure: Formation and Collapse," Memorandum 15/2014, Oslo University, Department of Economics.
    5. Michael D. Makowsky & Jared Rubin, 2011. "An Agent-Based Model of Centralized Institutions, Social Network Technology, and Revolution," Working Papers 2011-05, Towson University, Department of Economics, revised Oct 2011.
    6. Makowsky, Michael D. & Smaldino, Paul E., 2016. "The evolution of power and the divergence of cooperative norms," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 75-88.
    7. Shadmehr, Mehdi, 2015. "Extremism in revolutionary movements," Games and Economic Behavior, Elsevier, vol. 94(C), pages 97-121.

    More about this item

    Keywords

    Institutions; centralization; cascades; austerity; protests; revolution; preference falsification;

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • K19 - Law and Economics - - Basic Areas of Law - - - Other
    • H89 - Public Economics - - Miscellaneous Issues - - - Other

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