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Political instability and growth in dictatorships

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  • Jody Overland
  • Kenneth Simons
  • Michael Spagat

Abstract

We model growth in dictatorships facing each period an endogenous probability of “political catastrophe'' that would extinguish the regime's wealth extraction ability. Domestic capital exhibits a bifurcation point determining economic growth or shrinkage. With low initial domestic capital the dictator plunders the country's resources and the economy shrinks. With high initial domestic capital the economy eventually grows faster than is socially optimal. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Jody Overland & Kenneth Simons & Michael Spagat, 2005. "Political instability and growth in dictatorships," Public Choice, Springer, vol. 125(3), pages 445-470, December.
    • Handle: RePEc:kap:pubcho:v:125:y:2005:i:3:p:445-470
    DOI: 10.1007/s11127-005-3060-0
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    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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