Political Culture and Economic Decline
Posted: 27 Feb 2001
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: Suggested Citation