In this article I develop a new theory of how globalization in the form of increasing potential foreign direct investment (FDI) inflows affects democratization. As the level of potential FDI inflows increases, workers become more willing to support democratization because of the large wage benefits from liberalizing FDI under democracy, while capitalists become less willing to support democratization because of their increasing need for protection from the dictator in the form of FDI restrictions. Increased demand for protection allows dictators to extract larger share of rents from capitalists. The effect of increasing potential FDI on democratization is ambiguous because it increases both workers’ incentive to revolt and dictators’ resistance to democratization.
This article develops a new theory of how dictators can solve the guardianship dilemma. I study a dynamic game to show that the dictator may build a large army and deal with the guardianship dilemma by resorting to international conflicts. Specifically, when a military revolt is imminent, the dictator can obtain enough resources to buy off the military by attacking and ultimately defeating his international opponent. The framework thus shows that a weakly institutionalized polity may either have a small military or have a large military and be more aggressive on the international stage.
This article compares Plurality Voting (PV) and two forms of Runoff Elections (RE) in a setting in which (i) there are two majority-preferred alternatives, (ii) a strong minority backs a third alternative which would make the majority strictly worse off, and (iii) some of the majority voters are uninformed about the "correct" majority alternative. I show that in the informative equilibrium in Majority Runoff Elections (MRE), uninformed majority voters vote randomly with strictly positive probability, achieving partial information aggregation, while they always abstain in Automatic Runoff Elections (ARE), achieving full information aggregation and strictly improving the majority's welfare. However, uninformed majority voters do not abstain in PV, resulting in less information aggregation than in both MRE and ARE.
This article compares Plurality Voting (PV) and two forms of Runoff Elections (RE) in a setting in which (i) there are two majority-preferred alternatives, (ii) a strong minority backs a third alternative which would make the majority strictly worse off, and (iii) some of the majority voters are uninformed about the "correct" majority alternative. I show that in the informative equilibrium in Majority Runoff Elections (MRE), uninformed majority voters vote randomly with strictly positive probability, achieving partial information aggregation, while they always abstain in Automatic Runoff Elections (ARE), achieving full information aggregation and strictly improving the majority's welfare. However, uninformed majority voters do not abstain in PV, resulting in less information aggregation than in both MRE and ARE.
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