The State Independent from Voters: Rent Revenue Incomes and the Resource Curse

31 Pages Posted: 5 Feb 2014

See all articles by Vladimir Mau

Vladimir Mau

Gaidar Institute for Economic Policy; Russian Presidential Academy of National Economy and Public Administration

Ilia Zatcovetsky

Samuel Neaman Institute for Advanced Studies in Science and Technology

Konstantin Yanovskiy

Shomron Center for Economic Policy Research

Date Written: February 3, 2014

Abstract

If the authorities have the opportunity to receive incomes uncontrolled by society, this gives them great freedom of action. Such incomes do not depend on the quality of the public goods delivered, nor on the investment climate. Given a certain minimal level of organization, taxpayers can try to impose on the government, which needs their money, their own terms for using the resources received (and history has shown that this can often be done successfully). The history of many modern parliaments began with gatherings convened by the people whose money and armed forces made up the might of the state.

The absence of a need for the regime in power to ask its subjects for financial support in return for guarantees and privileges makes the regime’s forces, which are far superior in comparison with any individual market agent’s capacity, practically uncompensated for in any way. And if the government’s incomes enable it to offer bribes to citizens, then the authorities’ uncontrollability can weaken or even destroy the democratic institutions already in existence. Under such conditions, there can be no talk of constraints capable of providing universal secure guarantees for business independently of the will of the ruler.

Keywords: Rent revenue, voters' corruption, voters bribe, demand for institutions

JEL Classification: D72, D73, P16, O33

Suggested Citation

Mau, Vladimir and Zatcovetsky, Ilia and Yanovskiy, Konstantin, The State Independent from Voters: Rent Revenue Incomes and the Resource Curse (February 3, 2014). Available at SSRN: https://ssrn.com/abstract=2390348 or http://dx.doi.org/10.2139/ssrn.2390348

Vladimir Mau

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

Russian Presidential Academy of National Economy and Public Administration ( email )

Varnadskogo Avenue,82
Moscow, 119571
Russia

Ilia Zatcovetsky

Samuel Neaman Institute for Advanced Studies in Science and Technology ( email )

Technion, Haifa 32000
Israel

Konstantin Yanovskiy (Contact Author)

Shomron Center for Economic Policy Research ( email )

Kley Shir 8
Karney Shomron, 44855

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