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Political Parties and Network Formation
Topi Miettinen
Panu Poutvaara
We argue that anticorruption laws may provide an efficiency
rationale for why political parties should meddle in the
distribution of political nominations and government contracts.
Anticorruption laws forbid trade in spoils that politicians
distribute. However, citizens may pay for gaining access to
politicians and, thereby, to become potential candidates for
nominations. Such rent-seeking results in excessive network
formation. Political parties may reduce wasteful network
formation, thanks to their ability to enter into exclusive
membership contracts. This holds even though anticorruption laws
also bind political parties.
Keywords: political parties, two-sided platforms, rent-seeking,
network formation
JEL: D72 D85 L14
Date: 2006
URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_1663&r=soc
Democracy and Development: The Devil in the Details
Torsten Persson
Guido Tabellini
Does democracy promote economic development? This paper reviews
recent attempts to address this question that exploited within-
country variation. It shows that the answer is largely positive,
but also depends on the details of democratic reforms. First, the
sequence of economic vs political reforms matters: countries
liberalizing their economy before extending political rights do
better. Second, different forms of democratic government lead to
different economic policies, and this might explain why
presidential democracy leads to faster growth than parliamentary
democracy. Third, it is important to distinguish between expected and
actual political reforms. Taking expectations of regime
change into account helps identify a stronger growth effect of
democracy.
Keywords: democracy, reform, growth, institutions, difference in
difference
JEL: E00 O10 P00
Date: 2006
URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_1672&r=soc
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