DP2156 The Politics of Cooptation

Author(s): Graziella Bertocchi, Michael Spagat
Publication Date: May 1999
Keyword(s): Cooptation, Privatization, Upheaval, Welfare State
JEL(s): D3, D74, H3, P26
Programme Areas: International Macroeconomics, Transition Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2156

Group 1 holds political power. Group 2 threatens this power. Group 1 decreases the upheaval probability by co-opting some agents from Group 2 into a more benign Group 3. Improvements in upheaval technology lead to less co-optation. Increasing the relative size of Group 1 implies larger co-optation payments to a smaller group, decreasing the total resources committed to co-optation. In an extension in which Group 3 also threatens Group 1, although less destructively than does Group 2, co-optation transfers are reduced. Growth causes political stabilization. The theory applies to the origin of the welfare state, post-communist privatization and other situations.