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A Theory of Political Transitions

A Theory of Political Transitions Abstract We develop a theory of political transitions inspired by the experiences of Western Europe and Latin America. Nondemocratic societies are controlled by a rich elite. The initially disenfranchised poor can contest power by threatening revolution, especially when the opportunity cost is low, for example, during recessions. The threat of revolution may force the elite to democratize. Democracy may not consolidate because it is redistributive, and so gives the elite an incentive to mount a coup. Highly unequal societies are less likely to consolidate democracy, and may end up oscillating between regimes and suffer substantial fiscal volatility. (JEL D72, D74, O15, P16 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

A Theory of Political Transitions

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Publisher
American Economic Association
Copyright
Copyright © 2001 by the American Economic Association
Subject
Articles
ISSN
0002-8282
DOI
10.1257/aer.91.4.938
Publisher site
See Article on Publisher Site

Abstract

Abstract We develop a theory of political transitions inspired by the experiences of Western Europe and Latin America. Nondemocratic societies are controlled by a rich elite. The initially disenfranchised poor can contest power by threatening revolution, especially when the opportunity cost is low, for example, during recessions. The threat of revolution may force the elite to democratize. Democracy may not consolidate because it is redistributive, and so gives the elite an incentive to mount a coup. Highly unequal societies are less likely to consolidate democracy, and may end up oscillating between regimes and suffer substantial fiscal volatility. (JEL D72, D74, O15, P16 )

Journal

American Economic ReviewAmerican Economic Association

Published: Sep 1, 2001

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