Title: Inequality, Factor Prices and Political Regimes
Abstract: Noteworthy recent works by Boix (2003) and Acemoglu and Robinson (2006) suggest that democratization results from elite considerations of redistributive costs associated with democracy and threat of revolution (alternatively referred to as cost of repression). In both models, redistributive mechanism whereby higher inequality raises cost of democratization does most of heavy lifting. What exactly constitutes threat of revolution or cost of repression is under-specified, and there is no sense that propensity for revolution or costs of repression evolve in anything but random fashion. In this paper, we outline a simple model in which poor's relative class power or revolutionary incentive is conditional on factors of production they own and openness of international trading system. We suggest that exogenous changes in openness of international economy have implications for relative capacity of workers or the poor to threaten established order. We examine this hypothesis using data from 1820 to present, finding that interaction between labor abundance and openness of global economy have important implications for regime stability and democratization. Our theory and evidence provide one account linking political economy of international trade and inequality with observed tendency of democracies to appear in waves.
Publication Year: 2008
Publication Date: 2008-08-28
Language: en
Type: article
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