Public Sector Capital and the Transition from Dictatorship to Democracy

Research output: Contribution to journalArticle

Authors

Colleges, School and Institutes

External organisations

  • University of Oregon

Abstract

A model where a dictator decides on both the level of public-sector capital and whether to democratize is constructed. Under dictatorship the labour market is monopsonistic; democratization involves instituting a competitive labour market. Workers sometimes have a credible threat of revolution and this may affect the dictator's investment decision; it may also induce democratization. The possibility of a ‘political development trap’, where the dictator stifles development to stay in power, emerges. The model is used, inter alia, to explain the effects of the 1832 Reform Act in the UK and the worldwide positive correlation between income and democracy.

Details

Original languageEnglish
Pages (from-to)322-346
JournalManchester School
Volume82
Issue number3
Early online date19 Aug 2013
Publication statusPublished - Jun 2014