Political Culture and Economic Decline

Posted: 27 Feb 2001

See all articles by Arye L. Hillman

Arye L. Hillman

Bar-Ilan University - Department of Economics; Centre for Economic Policy Research (CEPR)

Heinrich W. Ursprung

University of Konstanz; CESifo (Center for Economic Studies and Ifo Institute)

Abstract

In societies with a political culture of rent-seeking, social norms do not disallow the use of political office for privileged distribution. Societies with such norms tend to be characterized by political insiders and outsiders. We describe the attendant contestability of rents in the two domains of rent-seeking when insiders seek politically assisgned benefits and outsiders seek to re-position themselves as insiders, and show how successive stages of political liberalization result in economic decline. The model is considered against the background of the political liberalization that occured in the post-socialist societies and the observed tendencies for economic decline, and at times economic collapse, in various of these societies' economies.

JEL Classification: H11, P30

Suggested Citation

Hillman, Arye L. and Ursprung, Heinrich, Political Culture and Economic Decline. European Journal of Political Economy, Vol. 16, 2000. Available at SSRN: https://ssrn.com/abstract=238836

Arye L. Hillman

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+97 29 774 6424 (Phone)
+97 29 771 5628 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Heinrich Ursprung (Contact Author)

University of Konstanz ( email )

Konstanz, D-78457
Germany
+49 7531 88 3713 (Phone)

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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