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The Impact of Individual Wealth on Posterior Political Power

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  • Rossi, Martin

Abstract

I exploit a unique historical event to explore the causal relationship between individual wealth and posterior political power. Shortly after the foundation of Buenos Aires, plots of land in the outskirts of the city were randomly assigned to all heads of household that participated in the expedition. Using this random allocation of land as a source of exogenous variation on individuals’ wealth, I find that wealth causes political power. I also explore possible mechanisms and find support for the hypothesis that wealth signals (or improves) ability.

Suggested Citation

  • Rossi, Martin, 2021. "The Impact of Individual Wealth on Posterior Political Power," MPRA Paper 110532, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:110532
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    References listed on IDEAS

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    1. Hoyt Bleakley & Joseph Ferrie, 2016. "Shocking Behavior: Random Wealth in Antebellum Georgia and Human Capital Across Generations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(3), pages 1455-1495.
    2. Daron Acemoglu & María Angélica Bautista & Pablo Querubín & James A. Robinson, 2007. "Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia," NBER Working Papers 13208, National Bureau of Economic Research, Inc.
    3. Ernesto Dal Bó & Pedro Dal Bó & Jason Snyder, 2009. "Political Dynasties," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 115-142.
    4. Hoyt Bleakley & Joseph P. Ferrie, 2013. "Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth," NBER Working Papers 19175, National Bureau of Economic Research, Inc.
    5. Martín Rossi, 2012. "Family Business: Causes and Consequences of Political Dynasties," Working Papers 114, Universidad de San Andres, Departamento de Economia, revised Oct 2014.
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    Cited by:

    1. Marianne Bernatzky & José María Cabrera & Alejandro Cid, 2017. "Frequency of testing Lessons from a field experiment in higher education," Documentos de Trabajo/Working Papers 1703, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
    2. Jason Poulos, 2019. "Land lotteries, long-term wealth, and political selection," Public Choice, Springer, vol. 178(1), pages 217-230, January.
    3. Martín Rossi, 2016. "Self-Perpetuation of Political Power: Evidence from a Natural Experiment in Argentina," Working Papers 127, Universidad de San Andres, Departamento de Economia, revised Aug 2016.
    4. Saez, Emmanuel & Stantcheva, Stefanie, 2018. "A simpler theory of optimal capital taxation," Journal of Public Economics, Elsevier, vol. 162(C), pages 120-142.
    5. Marianne Bernatzky & José María Cabrera & Alejandro Cid, 2014. "Gender & High Frequency vs. Low Frequency tasks in a context of Joint-Liability Incentives," Documentos de Trabajo/Working Papers 1405, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..

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    More about this item

    Keywords

    elites; political dynasties; representative political power; natural experiment;
    All these keywords.

    JEL classification:

    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • N46 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Latin America; Caribbean

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