Working Paper: NBER ID: w19158
Authors: Daron Acemoglu; Georgy Egorov; Konstantin Sonin
Abstract: We provide a general framework for the analysis of the dynamics of institutional change (e.g., democratization, extension of political rights or repression of different groups), and how these dynamics interact with (anticipated and unanticipated) changes in the distribution of political power and in economic structure. We focus on the Markov Voting Equilibria, which require that economic and political changes should take place if there exists a subset of players with the power to implement such changes and who will obtain higher expected discounted utility by doing so. Assuming that economic and political institutions as well as individual types can be ordered, and preferences and the distribution of political power satisfy natural "single crossing" (increasing differences) conditions, we prove the existence of a pure-strategy equilibrium, provide conditions for its uniqueness, and present a number of comparative static results that apply at this level of generality. We then use this framework to study the dynamics of political rights and repression in the presence of radical groups that can stochastically grab power. We characterize the conditions under which the presence of radicals leads to repression (of less radical groups), show a type of path dependence in politics resulting from radicals coming to power, and identify a novel strategic complementarity in repression.
Keywords: Political Economy; Institutional Change; Radical Politics; Repression
JEL Codes: C71; D71; D74
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| political power of players (Z22) | likelihood of institutional change (O17) |
| emergence of radical groups (O17) | repression against less radical factions (D70) |
| anticipation of repression by moderates (D72) | preemptive repressive actions against radicals (P37) |