Social Conflict and Gradual Political Succession: An Illustrative Model

This paper studies the evolution of political institutions in the face of conflict. We examine institutional reform in a class of pivotal mechanisms -- institutions that behave as if the resulting policy were determined by a "pivotal" decision maker drawn from the potential population of citizens and who holds full policy-making authority at the time. A rule-of-succession describes the process by which pivotal decision makers in period t + 1 are, themselves, chosen by pivotal decision makers in period t. Two sources of conflict - class conflict, arising from differences in wealth, and ideological conflict, arising from differences in preferences are examined. In each case, we characterize the unique Markov Perfect Equilibrium of the associated dynamic political game, and show that public decision-making authority evolves monotonically downward in wealth and upward in ideological predisposition toward the public good. We then examine rules-of-succession when ideology and wealth exhibit correlation.