Federal institutions and the democratic transition

Description

"We present a model of a peaceful transition in South Africa from white, elite rule under apartheid to a multi-racial democracy. We ask how can the emerging majority credibly promise not to exploit the once ruling elite? Under South Africa's "democratic federalism" the constitution creates an annual policy game where the new majority and the elite each control one policy instrument of importance to the other. The game has a stable, stationary democratic equilibrium that the elite prefer to autocratic rule. For the elite, the move to democracy means higher tax rates, but also higher economic growth; democracy is preferred to apartheid if the elite's rate of time preference is less than the transition's rate of return"--National Bureau of Economic Research web site.

Subjects

Series Statement

• NBER working paper series -- working paper 13733
• Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13733.

Links

• http://papers.nber.org/papers/w13733
• URL