2.2.1 The dictator
Definition A dictator is an individual who uses his monopoly of force across a territory
and through time to impose his own preferences. Therefore, following the criteria proposed
by Przeworski and Limongi (1993) to define political regimes, the dictator monopolizes
the locus of decision-making and the property right to the fiscal residuum which is the
difference between the total output and the cost of government.
Preferences The dictator maximizes an additively separable utility function of the
form:
subject to
∞
U=X
t=0
gt1-σ
(1-σ)(1+ρ)t
σ > 0, ρ > 0
(7)
gt = qtτtf (kt), (8)
where τ ∈ (0, 1) is the income tax rate, qt ∈ (0, 1) is the rate of predation and gt is the
dictator’s consumption stream at time t. The consumption gt includes all the expenditures
required to maintain his power. All of this is financed by an income tax whose rate, τt ,
is set by himself. His choice depends on ρ, the dictator’s rate of time preference, q, the
intensity of predation and σ , the degree of concavity of the utility function.
The parameter ρ describes the dictator’s attitude toward the future. A high ρ means that
the dictator has a strong preference for the present and cares little about the future. This
will result in level effects on the long-term output.
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