Discussion Paper Details

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Title: Political Instability and Growth in Dictatorships

Author(s): Jody Overland, Kenneth L Simons and Michael Spagat

Publication Date: December 2000

Keyword(s): Bifurcation, Dictatorship, Growth and Political Economy

Programme Area(s): Public Economics and Transition Economics

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.

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Bibliographic Reference

Overland, J, Simons, K and Spagat, M. 2000. 'Political Instability and Growth in Dictatorships'. London, Centre for Economic Policy Research.