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Sökning: onr:"swepub:oai:gup.ub.gu.se/63022" > Why Are Market Econ...

Why Are Market Economies Politically Stable? A Theory of Capitalist Cohesion

Dalgaard, Carl-Johan (författare)
Olsson, Ola, 1971- (författare)
Göteborgs universitet, Institutionen för nationalekonomi med statistik, Gothenburg University, Department of Economics
Göteborgs universitet Handelshögskolan. Institutionen för nationalekonomi med statistik. 
Göteborg 2007
Engelska.
Serie: Working Papers in Economics (online), 1403-2465 ; 281
  • Rapport (övrigt vetenskapligt)
Abstract Ämnesord
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  • The present paper documents that political stability is positively associated with the extent of domestic trade. In explaining this reg- ularity, we provide a model where political cohesion is linked to the emergence of a fully functioning market economy. Without market ex- change, the welfare of inherently selfish individuals will be mutually independent. As a result, political negotiations, echoing the prefer- ences of the citizens of society, will be dog-eat-dog in nature. Whoever has greater bargaining power will be willing to make decisions that en- hance the productivity of his supporters at the expense of other groups in society. If the gains from specialization become su¢ ciently large, however, a market economy will emerge. From being essentially non- cooperative under self-sufficiency, the political decision making process becomes cooperative in the market economy, as the welfare of individ- uals will be mutually interdependent due to the exchange of goods.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)
SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Political cohesion
Economic growth
JEL codes: P16
O41

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rap (ämneskategori)
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