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NICEP 2024-10: Theory of developmental dictatorship



This article studies the developmental motives of a dictator under the modernisation hypothesis. He faces a trade-off between pursuing higher future gains with growing threats from the rise of the middle class and accepting lower gains for a more stable regime. I show that his optimal strategy is to invest in an underdeveloped economy for higher future returns. As the economy matures, investment declines as the focus shifts toward maintaining the regime. Without this threat, the economy regresses or fully develops depending on the profitability of investment and regime stability. My framework helps explain empirical puzzles about why some underdeveloped autocracies achieve faster economic growth. I also analyse how steady state varies by the length of future horizon under consideration. Contrary to Olson (1993)’s traditional theory that longer horizon concern makes high development, I find that a farsighted decision-making leads to a lower steady state.

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Hyungmin Park

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Posted on Friday 21st June 2024

Nottingham Interdisciplinary Centre for Economic and Political Research

University of Nottingham
Law and Social Sciences Building
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Nottingham, NG7 2RD

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