Public Sector Capital and the Transition from Dictatorship to Democracy | Zendy

Ellis Christopher J. | Zendy; Fender John | Zendy

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Public Sector Capital and the Transition from Dictatorship to Democracy

Author(s) -

Ellis Christopher J.,

Fender John

Publication year - 2014

Publication title -

the manchester school

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.361

H-Index - 42

eISSN - 1467-9957

pISSN - 1463-6786

DOI - 10.1111/manc.12027

Subject(s) - dictatorship , democratization , dictator , economics , democracy , monopsony , investment (military) , politics , revenue , market economy , economic system , labour economics , political science , law , accounting

A model where a dictator decides on both the level of public‐sector capital and whether to democratize is constructed. Under dictatorship the labour market is monopsonistic; democratization involves instituting a competitive labour market. Workers sometimes have a credible threat of revolution and this may affect the dictator's investment decision; it may also induce democratization. The possibility of a ‘political development trap’, where the dictator stifles development to stay in power, emerges. The model is used, inter alia , to explain the effects of the 1832 R eform A ct in the UK and the worldwide positive correlation between income and democracy.

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