Oligarchy, democracy, and state capacity created by Helios Herrera and César Martinelli

By:

Helios Herrera [author]

Contributor(s):

Martinelli, César [author]

Material type: Text

TextSeries: Economic theory ; Volume 52, number 1Berlin: Springer, 2013Content type:

text

Media type:

unmediated

Carrier type:

volume

ISSN:

0938220

Subject(s):

State capacity -- Democratization -- Oligarchy

LOC classification:

HB119 ECO

Online resources:

Click here to access online

Abstract: We develop a dynamic political economy model in which investment in the state capacity to levy taxes and deter crime is a policy variable, and we study the evolution of state capacity when policy is chosen by an elite. We show that democratization in the sense of expansion of the elite leads to an increased investment in state capacity and to a reduction in illegal activities and has nonmonotonic effects on tax rates as it reduces the willingness of the elite to engage in particularistic spending but enhances its willingness to provide public goods. Depending on initial conditions, consensual political changes may lead either to democratization or to the entrenchment of an immovable elite.

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Holdings
Item type	Current library	Call number	Vol info	Copy number	Status	Notes	Date due	Barcode
Journal Article	Main Library - Special Collections	HB119 ECO (Browse shelf(Opens below))	Vol. 52, no.1 (pages 165-187)	SP21038	Not for loan	For in house use only

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We develop a dynamic political economy model in which investment in the state capacity to levy taxes and deter crime is a policy variable, and we study the evolution of state capacity when policy is chosen by an elite. We show that democratization in the sense of expansion of the elite leads to an increased investment in state capacity and to a reduction in illegal activities and has nonmonotonic effects on tax rates as it reduces the willingness of the elite to engage in particularistic spending but enhances its willingness to provide public goods. Depending on initial conditions, consensual political changes may lead either to democratization or to the entrenchment of an immovable elite.

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