Efficiency, Policy Selection, and Growth in Democracy and Autocracy: A Formal Dynamical Model

27 Pages Posted: 1 Nov 2014

See all articles by Andrei Akhremenko

Andrei Akhremenko

National Research University Higher School of Economics

Alexander Petrov

National Research University Higher School of Economics

Date Written: October 31, 2014

Abstract

The main focus of this paper is the impact of efficiency losses, related to public capital stock, on the prospects of economic growth in democratic and autocratic political environments. We introduce a distinction between two types of efficiency loss: along with the loss of public capital during its accumulation, we take into account the process of capital stock depreciation. We demonstrate that the decrease in efficiency of any type makes the probability of long-run growth higher for autocracies; however, in the presence of high efficiency, democracies tend to perform better. The results were obtained by formal analysis and computational experiments, realized on the basis of an original dynamical model.

Keywords: dynamical formal model, policy space, democracy, autocracy, economic growth, efficiency, public capital

JEL Classification: C02, P16, Z18

Suggested Citation

Akhremenko, Andrei and Petrov, Alexander, Efficiency, Policy Selection, and Growth in Democracy and Autocracy: A Formal Dynamical Model (October 31, 2014). Higher School of Economics Research Paper No. WP BRP 16/PS/2014, Available at SSRN: https://ssrn.com/abstract=2517316 or http://dx.doi.org/10.2139/ssrn.2517316

Andrei Akhremenko (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Alexander Petrov

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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