Political Rents, Promotion Incentives, and Support for a Non-Democratic Regime



These three derivatives can be jointly interpreted as a positive effect of expected rent - the
product of the boss premium and the probability of promotion - on the equilibrium number of
activists.

2.4. Production technology

Further analysis requires specification of the activists’ production function, f(Na). I
argued earlier in this paper that activists serve primarily as labor supervisors. Activists-
supervisors, whose function is to elicit a higher level of effort from fellow workers, can be
considered as a sort of labor-augmenting technology. Then the rent-production function can
be represented as:

(19)          f(Na) = F{K, (1+aNa) L},

where K is capital, L is labor, a is a productivity parameter. F(K,L) is the production function
of the economy such that: F
K >0, FL >0, FKK <0, FLL <0, FKL >0.

Under these conditions, the left-hand side of (16) becomes:

(20)         X(Na) = aNa FL L/F.

Obviously, X(Na) >0, X(0) =0. In addition, X'(0)>0, and X(Na) reaches the maximum at a
certain point, which may or may not lie within the range of admissible values of
Na, to the left
of min(1,
yκNbrR ). To verify the latter properties, let us are differentiate X(Na) with respect
to the number of activists:

(21)


dX

dNa


= aL- [(Fl + aLN Fll F aLNa (Fl )2 ]= a'

F2 L        a LL           a L      F 2


(

Fl + aLNa Fll

I


1F1 j
f J


20




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