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Political Equality, Coalition Formation, and Economic Growth in Autocracies


E2018004                     2018-01-29

Yang Yao*

Cheung-Kong Scholar and Boya Chair Professor

National School of Development, Peking University


China Center for Economic Research



Economic performance of an autocracy depends on the inclusiveness of its political and economic institutions, which in turn depend on the nature of the ruling coalition the autocrat relies on to rule the society. To create more rents, the autocrat prefers a larger coalition. In contrast, member groups prefer a smaller coalition to monopolize the privileges extended by the coalition. A stable coalition requires that member groups possess a close range of political powers. Therefore, more political equality in the society leads to a larger ruling coalition. A stronger autocrat fulfills the same purpose because she is more capable of forming an alliance with the disenchanted groups to defeat exclusion. Social output increases when the ruling coalition becomes more inclusive. Three case studies on mainland China, the Philippines, and Taiwan are provided to validate the theoretical predictions.

autocracy, inclusive institutions, disinterested governments

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