Ítem
Acceso Abierto

Political intervention in economic activity


Fecha
2010

Directores

ISSN de la revista
Título del volumen
Editor
Universidad del Rosario

Buscar en:

Métricas alternativas

Resumen
Abstract
This paper proposes a political economy explanation of bailouts to declining industries. A model of probabilistic voting is developed, in which two candidates compete for the vote of two groups of the society through tactical redistribution. We allow politicians to have core support groups they understand better, this implies politicians are more or less effective to deliver favors to some groups. This setting is suited to reproduce pork barrels or machine politics and patronage. We use this model to illustrate the case of an economy with both an efficient industry and a declining one, in which workers elect their government. We present the conditions under which the political process ends up with the lagged-behind industry being allowed to survive.
Palabras clave
Keywords
probabilistic voting , redistribution , survival of inefficient firms , pork barrels
Buscar en:
Gilles, E. (2010). Political intervention in economic activity. Bogotá: Universidad del Rosario.