Download This PaperThe Dynamics of Property Rights in Modern Autocracies
55 Pages Posted: 15 May 2020 Last revised: 1 Jul 2021
Date Written: April 20, 2020
Abstract
This paper studies a dynamic model of property ownership and appropriation in modern autocracies. An autocrat represents the interests of an elite ``in-group." It chooses whether and how much to appropriate from public assets and from private assets of an ``out-group" at each date. To obtain apparent consent the autocrat implements an ownership assignment only if it is accepted by the affected citizens. However, because its enforcement of property rights is tied to the duration of its commitment, the autocrat's enforcement is conditional and temporary. Consequently, the autocrat systematically appropriates property from the out-group and from public assets. Under some initial conditions, the autocrat initially implements popular land reform only to reverse course later on. More generally, wealth shares of both public property and private property of the out-group decline monotonically after an initial adjustment period. The model rationalizes the connection between increasing wealth concentration and privatization in autocracies such as Russia and China. Simulations of these countries' wealth distributions to mid 21st century display widening gaps in wealth between elites and the rest of the populace.
Finally, we show that the ruling group under anocracy, an autocratic system that admits civil society groups, will generally be better off than under a traditional autocracy. The dilemma is that the anocratic system might enable the growth of an opposition party that eventually displaces the ruling group.
Keywords: Autocracy, Anocracy, Property Rights, Appropriation, Consent, Civil Society Groups, Status Quo, Samuelson Rule
JEL Classification: C73, D72, H13, H41, P5
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