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Political Competition in Economic Perspective

Author

Listed:
  • Pranab Bardhan

    (University of California, Berkeley)

  • Tsung-Tao Yang

    (University of California, Berkeley)

Abstract

It is sometimes argued that political competition yields benefits to the citizens just as competition in economic markets yields benefits to consumers. We consider the economic costs and benefits of political competition and find that the story is somewhat more complicated. We first review the limited existing literature on this topic, and in the process, identify a number of distinct interpretations of what constitutes political competition. We then turn our attention to two forms of political competition based on what we refer to as accountability for incumbents and electoral politics. We find that, while political competition can yield allocative benefits for the public, it can also generate aggregate welfare costs by constricting the set of politically feasible public investments.

Suggested Citation

  • Pranab Bardhan & Tsung-Tao Yang, 2004. "Political Competition in Economic Perspective," Development and Comp Systems 0407009, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0407009 Note: 35 pages, Acrobat .pdf
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    References listed on IDEAS

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    1. Torsten Persson & Gérard Roland & Guido Tabellini, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1163-1202.
    2. Mondino, Guillermo & Sturzenegger, Federico & Tommasi, Mariano, 1996. "Recurrent High Inflation and Stabilization: A Dynamic Game," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 981-996, November.
    3. Skilling, David & Zeckhauser, Richard J., 2002. "Political competition and debt trajectories in Japan and the OECD," Japan and the World Economy, Elsevier, vol. 14(2), pages 121-135, April.
    4. repec:cup:apsrev:v:100:y:2006:i:01:p:115-131_06 is not listed on IDEAS
    5. Dixit, Avinash & Londregan, John, 1995. "Redistributive Politics and Economic Efficiency," American Political Science Review, Cambridge University Press, vol. 89(04), pages 856-866, December.
    6. James A. Robinson & Daron Acemoglu, 2000. "Political Losers as a Barrier to Economic Development," American Economic Review, American Economic Association, vol. 90(2), pages 126-130, May.
    7. Torsten Persson & Guido Tabellini, 2002. "Political Economics: Explaining Economic Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661314, January.
    8. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-1155, December.
    9. Acemoglu, Daron & Robinson, James A., 2006. "Economic Backwardness in Political Perspective," American Political Science Review, Cambridge University Press, vol. 100(01), pages 115-131, February.
    10. Rasmusen, Eric & Ramseyer, J Mark, 1994. "Cheap Bribes and the Corruption Ban: A Coordination Game among Rational Legislators," Public Choice, Springer, vol. 78(3-4), pages 305-327, March.
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    Citations

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    Cited by:

    1. Grażyna Bukowska & Joanna Siwińska-Gorzelak, 2016. "Can fiscal decentralisation curb fiscal imbalances?," Working Papers 2016-35, Faculty of Economic Sciences, University of Warsaw.
    2. Baraldi A. Laura, 2008. "Effects of Electoral Rules, Political Competition and Corruption on the Size and Composition of Government Consumption Spending: An Italian Regional Analysis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-37, July.
    3. Alfano, Maria Rosaria & Baraldi, Anna Laura & Cantabene, Claudia, 2013. "The role of political competition in the link between electoral systems and corruption: The Italian case," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 1-10.
    4. Madiha Afzal, 2014. "Do barriers to candidacy reduce political competition? Evidence from a bachelor’s degree requirement for legislators in Pakistan," Public Choice, Springer, vol. 161(1), pages 51-72, October.
    5. Kapstein, Ethan & Converse, Nathan, 2006. "The Economics of Young Democracies: Policies and Performance," MPRA Paper 553, University Library of Munich, Germany.
    6. Yogesh Uppal, 2011. "Does legislative turnover adversely affect state expenditure policy? Evidence from Indian state elections," Public Choice, Springer, vol. 147(1), pages 189-207, April.
    7. Silje Aslaksen & Ragnar Torvik, 2006. "A Theory of Civil Conflict and Democracy in Rentier States," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 571-585, December.
    8. Ethan Kapstein & Nathan Converse, 2006. "The Economics of Young Democracies: Policies and Performance," Working Papers 85, Center for Global Development.
    9. Salvatore Capasso & Lodovico Santoro, 2016. "The Determinants of the Contract of Corruption: Theory and Evidence," CSEF Working Papers 429, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    10. repec:sgh:gosnar:y:2016:i:6:p:95-114 is not listed on IDEAS
    11. Pranab Bardhan, 2015. "State and Economic Development: The Need for a Reappraisal of the Current Literature," Working Papers id:7060, eSocialSciences.

    More about this item

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P11 - Economic Systems - - Capitalist Systems - - - Planning, Coordination, and Reform

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