Working Paper: CEPR ID: DP8406
Authors: Florian Jung; Uwe Sunde
Abstract: This paper studies the endogenous emergence of political regimes in societies in which productive resources are distributed unequally and institutions do not ensure political commitments. The results imply that for any level of development there exists a distribution of resources such that democracy emerges in equilibrium, but there are distributions of resources for which democracy is infeasible in equilibrium irrespective of the level of development. The model also delivers results on the stability of democracy with regard to changes in the economic and demographic environment. The results are consistent with the different political regimes that emerged in Germany after 1871.
Keywords: Coalition formation; Democracy; Development; Income inequality
JEL Codes: H10; O10; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher levels of economic development and a more equal distribution of resources (O15) | likelihood of democracy emerging and persisting (O17) |
| distribution of resources (D30) | emergence of democracy in equilibrium (D72) |
| distribution of resources (D30) | oligarchy or dictatorship (D72) |
| changes in the distribution of resources (D30) | stability of democracy (D72) |
| extreme inequality (D31) | oligarchic or dictatorial regimes (P26) |