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Olson: Power and prosperity

Disclaimer. Don't rely on these old notes in lieu of reading the literature, but they can jog your memory. As a grad student long ago, my peers and I collaborated to write and exchange summaries of political science research. I posted them to a wiki-style website. "Wikisum" is now dead but archived here. I cannot vouch for these notes' accuracy, nor can I even say who wrote them. If you have more recent summaries to add to this collection, send them my way I guess. Sorry for the ads; they cover the costs of keeping this online.

Olson. 2000. Power and prosperity. New York: Basic Books.

Y: Protection of contract and property rights (also tax levels, public goods provision)

X1: Regime's discount factor/probability of survival

X2: Regime's stake in the market (narrow, encompassing, superencompassing)

AN ABSTRACT BY WAY OF ANALOGY:

If a roving bandit robs a village, he takes everything. But if a stationary bandit (e.g. a king) robs a village, he will take as much as he can without killing his source of future revenue. This king will set tax rates at a level that maximizes his revenues; because GDP falls as taxes rise, the king maximizes his revenue at a tax rate far lower than 100%. Moreover, the king will find it in his interest to fund certain public goods to promote domestic growth, which further increases his revenues. This is the other invisible hand: autocrats have incentives to work toward the public good even when they have no real intention besides predation. (Tax rates and spending on public goods are defined by the "reciprocal rule.")

INDEPENDENT VARIABLES IN MORE DETAIL:

IN THE CONTEXT OF THIS WEEK'S READINGS:


Research by the same authors

Research on similar subjects

Tags

Olson, Mancur (author)Political ScienceEconomicsKleptocracyDemocracyDictatorshipPowerGrowthPublic GoodsPredatory Government

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