Political Instability and Growth in Dictatorships

40 Pages Posted: 20 Feb 2001

See all articles by Michael Spagat

Michael Spagat

University of London - Department of Economics; Centre for Economic Policy Research (CEPR)

Kenneth L. Simons

Rensselaer Polytechnic Institute (RPI) - Department of Economics

Jody R. Overland

Independent

Date Written: November 2000

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.

JEL Classification: D9, O1, H

Suggested Citation

Spagat, Michael and Simons, Kenneth L. and Overland, Jody R., Political Instability and Growth in Dictatorships (November 2000). Available at SSRN: https://ssrn.com/abstract=260758 or http://dx.doi.org/10.2139/ssrn.260758

Michael Spagat (Contact Author)

University of London - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom
+44 1784 414 001 (Phone)
+44 1784 439 534 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Kenneth L. Simons

Rensselaer Polytechnic Institute (RPI) - Department of Economics ( email )

110 8th Street
Troy, NY 12180
United States
518-276-3296 (Phone)
518-276-2235 (Fax)

HOME PAGE: http://www.rpi.edu/~simonk/

Jody R. Overland

Independent ( email )

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