Abstract (may include machine translation)
This paper presents a theory of endogenous economic institutions in non-democracies, where political accountability is enforced through the threat of revolution. We consider a dynamic game between an elite ruling class and a disenfranchised working class, in which workers have imperfect information about the economy's productive possibilities. We characterize the conditions under which (i) the elite implement an inefficient rent-creating economic institution at the risk of provoking a revolution based on institutional grievances, (ii) information shocks can catalyze revolutionary movements that may be contagious among similar countries, and (iii) democratic transitions can be consolidated following revolutionary liberalizations.
Original language | English |
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Pages (from-to) | 37-48 |
Number of pages | 12 |
Journal | European Journal of Political Economy |
Volume | 37 |
DOIs | |
State | Published - 1 Mar 2015 |
Keywords
- Contagion
- Democratic consolidation
- Economic liberalization
- Inefficient institutions
- Revolution