On Dictatorship, Economic Development and Stability



and economic development is analyzed in section 3. Section 4 studies the political stability
of dictatorship. The role of the threat of anarchy is examined in section 5. Finally, section
6 concludes.

2 A model of dictatorship: characterization

Consider an economy under dictatorship that is populated by overlapping generations of
people living for two periods and ruled by a dictator. We assume that the dictator is
infinitely lived (i.e. the dictator and his successors) because we are interested in dicta-
torship as a regime. The dictator has the monopoly of power over the fiscal and police
administrations. He solely determines the amount of taxes to levy. A part of them is
allocated to the payroll of his police forces, judiciary and fiscal agents as well as to his
own consumption. The other part is used to finance the maintenance of social order.

We study the behavior of this dictator in an overlapping generations model extended from
Diamond (1965). Time is discrete and goes from 0 to
. At each period there are N
(normalized to 1) citizens and there is no population growth.

2.1 The economy

All agents (including the dictator) in this economy are price-takers and all markets are
competitive. At each period
t, there is one physical good produced from capital, K , and
labor,
L. This physical good can be consumed or invested by the citizens to build future
capital, and consumed by the dictator or redistributed to the citizens under the form of



More intriguing information

1. The Trade Effects of MERCOSUR and The Andean Community on U.S. Cotton Exports to CBI countries
2. The name is absent
3. The Determinants of Individual Trade Policy Preferences: International Survey Evidence
4. BILL 187 - THE AGRICULTURAL EMPLOYEES PROTECTION ACT: A SPECIAL REPORT
5. Distortions in a multi-level co-financing system: the case of the agri-environmental programme of Saxony-Anhalt
6. Expectation Formation and Endogenous Fluctuations in Aggregate Demand
7. ASSESSMENT OF MARKET RISK IN HOG PRODUCTION USING VALUE-AT-RISK AND EXTREME VALUE THEORY
8. Studying How E-Markets Evaluation Can Enhance Trust in Virtual Business Communities
9. The Making of Cultural Policy: A European Perspective
10. Feeling Good about Giving: The Benefits (and Costs) of Self-Interested Charitable Behavior