Political Economics NES Fall 2012 Konstantin Sonin

Political Economics

Fall 2012

Professor: Konstantin Sonin, office 922 (2), email: ksonin(at)nes.ru

We will cover basics of political economics such as models of Downsian political competition,
parliamentary decision making, special interests and informative lobbying, and discuss their
usefulness in understanding political processes such as recent presidential and parliamentary
elections around the World. A less conventional part includes material on political economy of
non-democratic regimes.

The course requirements include 2 home assignments essays, with each assignment requiring
some reading, some internet search and some model-building, and a mid-term exam, where the
task will be to develop a theory to explain a certain empirical pattern. Essays’ weight is 40% of
grade, mid-term and the final exam is 25% each, and the balance is for class participation.

Office hours by appointment.

Asterisks denote required reading. Papers without asterisks are supplementary and should be
read by those interested in political economics.

Torsten Persson and Guido Tabellini (2000) "Political Economics", MIT Press.
Daron Acemoglu and James Robinson (2005) “Economic Origins of Dictatorship and
Democracy”, Cambridge U.Press.

Papers from the reading list can be downloaded at the course web-page.

There will be 2-3 seminars to learn how to work with formal models.

Preferences and Elections

*Myerson, R. (1999)"Theoretical Comparisons of Electoral Systems," European Economic

Review 43:671-697.

Downsian Model of Political Competition

*Persson, T., Tabellini, G. (2000) "Political Economics", MIT Press, Ch. 2-3

Persson, T., Roland, G., Tabellini, G. (1997) "Separation of Power and Political Accountability,"
Quarterly Journal of Economics 4:1163-1202

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Political Economics NES Fall 2012 Konstantin Sonin

Acemoglu, D., Robinson, J. (2005), "Chapter 8: The Role of the Middle Class."

Political Accountability

Baron, D. (1994) "Electoral competition with informed and uninformed voters," American
Political Science Review 88:33-47

Barro, R. (1973) "Control of politicians," Public Choice 14:19-42

Besley, T., Coate, S. (1997) "An economic model of representative democracy," Quarterly
Journal of Economics 112:85-114

Dixit, A., Grossman, G., Helpman, E. (1997) "Common agency and coordination," Journal of
Political Economy 105:752-769

Ferejohn, J. (1996) "Incumbent performance and electoral control," Public Choice 50:5-26
(1986)

Candidates with Identity

Osborne, Martin J. and Al Slivinski. 1996. A Model of Political Competition with Citizen
Candidates." Quarterly Journal of Economics 111:65-96.

Scott Gehlbach, Konstantin Sonin, and Ekatherina Zhuravskaya Businessman Candidates,

American Journal of Political Science, 54 (3), 718-736, July 2010.

Lobbying
Grossman, G., Helpman, E. "Electoral competition and special interest politics," Review of
Economic Studies 63:265-286.

Bernheim, Douglas B. and Michael D. Whinston. 1986. Menu Auctions, Resource Allocation,
and Economic Inffluence." Quarterly Journal of Economics 101(1):1-31.

Commitment Problem in Politics

*Acemoglu, D. (2003) "Why Not A Political Coase Theorem? Social Conflict, Commitment and
Politics", Journal of Comparative Economics, 31-4.

Dixit, G., Grossman, G., Gul, F. (2000) "The Dynamics of Political Compromise," Journal of
Political Economy, 108, 531-568.

*North, D., Weingast, B. (1989) "Constitutions and Commitment: The Evolution of Institutional
Governing Public Choice in Seventeenth-Century England", Journal of Economic History,
49(4):803-832.

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Schwarz, M., Sonin, K. (2003) "A Theory of Brinkmanship, Conflicts, and Commitments", Journal
of Law, Economics, and Organization, 24(1): 161-183.

Evolution of Franchise
* Acemoglu, D., Robinson, J. (2000) "Why Did the West Extend the Franchise?
Democracy,Inequality, and Growth in Historical Perspective," Quarterly Journal of Economics
115:1167-1199.

Acemoglu, D., Robinson, J. (2005), "Chapter 6: Democratization."

Engerman, R., Sokoloff, K. (2005) "The evolution of Suffrage Institutions in the New World"
Journal of Economic History, 65 (4): 891-921.

Consequences of Constitutions
* Acemoglu, D. (2005) "Constitutions, politics and economic growth: A review essay on Persson
and Tabellini's "The Economic Effects of Constitutions", Journal of Economic Literature.

Milesi-Feretti, G.-M., Perotti, R.., Rostagno, M. (2002) "Electoral systems and the composition of
government spending", Quarterly Journal of Economics 117:609-657.

Persson, T., Tabellini, G. (2003) "The Economic Effects of Constitutions: : What Do the Data
Say?" MIT Press, Ch. 3-9.

Persson, T., Tabellini, G. (2004) "Constitutional rules and fiscal policy outcomes", American
Economic Review 94:25-46

Persson, T., Tabellini, G., Trebbi, F. (2003) "Electoral rules and corruption", Journal of the
European Economic Association 1:958-989

*Persson, T., Roland, G., Tabellini, G. (2007) "Electoral rules and government spending in
parliamentary democracies", Quarterly Journal of Political Science: Vol. 2:No 2, pp 155-188.

Persson, T. (2005) "Forms of democracy, policy, and economic development", NBER Working
Paper, No. 11171

Persson, T., Tabellini, G. (2004) "Constitutions and economic policy", Journal of Economic
Perspectives 18:75-98

Inefficient Institutions and Reforms

*Murphy, K., Shleifer, A., Vishny, R. (1993) "Why Is Rent-Seeking So Costly to Growth?"
American Economic Review, 83:409-14

Hellman, J. (1998) "Winners Take All: the Politics of Partial Reform", World Politics, 50:203-234

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Political Economics NES Fall 2012 Konstantin Sonin

Polishchuk, L., Savvateev, A. (2000) "Spontaneous (Non-) Emergence of Property Rights",

mimeo.

* Shleifer, A., Treisman, D. (2000) Chapter 1 in the "Without a Map: Political Tactics and
Economic Reform in Russia".

Sonin, K. (2003) "Why the Rich May Favor Poor Protection of Property Rights", Journal of
Comparative Economics, 31 (4), 715-731.

Non-democratic Politics
Acemoglu, Daron, Robinson, James, and Verdier, Thierry (2004) “Kleptocracy and Divide-and-
Rule: A Model of Personal Rule,” Journal of the European Economic Association Papers and
Proceedings, April—May 2004, Vol. 2, 162—192.

Acemoglu, Daron (2007) “Oligarchic Versus Democratic Societies.” Journal of European

Economic Association, forthcoming.

*Besley, T., Kudamatsu, M. (2007) “Making Autocracy Work”, mimeo.

*Egorov, G., Guriev, S., Sonin, K. (2009) “Why Resource-Poor Dictators Allow Media Freedom:
Theory and Evidence from Panel Data”, American Political Science Review, 103 (4), 645-668.

Egorov, G., Sonin, K. (2005) “The Killing Game: A Dynamic Theory of Non-democratic
Succession”, mimeo.

*Egorov, G., Sonin, K. (2011) “Dictators and their Viziers: Endogenizing the Loyalty-Competence
Trade-off”, Journal of the European Economic Association

Myerson, R. (2007) “The Autocrat’s Credibility Problem and the Foundations of the
Constitutional State”, mimeo.

Myerson, R. (2007) “Leadership, Trust, and Power: Dynamic Moral Hazard in High Office”,
mimeo.

Padro i Miquel, G. (2006) "The Control of Politicians in Divided Societies: The Politics of Fear"
NBER Working Paper No. W12573

Acemoglu, D., Robinson, J. (2005), "Chapter 5: Non-democratic politics."

Besley, Timothy and Andrea Prat. 2006. Handcuffs for the Grabbing Hand? Media Capture and
Political Accountability." American Economic Review 96:720-736.