Bernhardt, Dan
Demagogues and the economic fragility of democracies / by Dan Bernhardt, Stefan Krasa and Mehdi Shadmehr
Resumen.
Bibliografía.
We investigate the susceptibility of democracies to demagogues, studying tensions between representatives who guard voters' long-run interests and demagogues who cater to voters' short-run desires. Parties propose consumption and investment. Voters base choices on current-period consumption and valence shocks. Younger/poorer economies and economically disadvantaged voters are attracted to the demagogue's disinvestment policies, forcing farsighted representatives to mimic them. This electoral competition can destroy democracy: if capital falls below a critical level, a death spiral ensues with capital stocks falling thereafter. We identify when economic development mitigates this risk and characterize how the death-spiral risk declines as capital grows large.
DEMOCRACIA
POPULISMO
DESARROLLO ECONOMICO
DESIGUALDAD
POBREZA
MODELOS ECONOMETRICOS
Krasa, Stefan
Shadmehr, Mehdi
The American Economic Review 0002-8282v. 112, n. 10, October 2022, p. 3331-3366
Demagogues and the economic fragility of democracies / by Dan Bernhardt, Stefan Krasa and Mehdi Shadmehr
Resumen.
Bibliografía.
We investigate the susceptibility of democracies to demagogues, studying tensions between representatives who guard voters' long-run interests and demagogues who cater to voters' short-run desires. Parties propose consumption and investment. Voters base choices on current-period consumption and valence shocks. Younger/poorer economies and economically disadvantaged voters are attracted to the demagogue's disinvestment policies, forcing farsighted representatives to mimic them. This electoral competition can destroy democracy: if capital falls below a critical level, a death spiral ensues with capital stocks falling thereafter. We identify when economic development mitigates this risk and characterize how the death-spiral risk declines as capital grows large.
DEMOCRACIA
POPULISMO
DESARROLLO ECONOMICO
DESIGUALDAD
POBREZA
MODELOS ECONOMETRICOS
Krasa, Stefan
Shadmehr, Mehdi
The American Economic Review 0002-8282v. 112, n. 10, October 2022, p. 3331-3366