, Volume 125, Issue 3-4, pp 445-470

Political instability and growth in dictatorships

Rent the article at a discount

Rent now

* Final gross prices may vary according to local VAT.

Get Access


We model growth in dictatorships facing each period an endogenous probability of “political catastrophe'' that would extinguish the regime's wealth extraction ability. Domestic capital exhibits a bifurcation point determining economic growth or shrinkage. With low initial domestic capital the dictator plunders the country's resources and the economy shrinks. With high initial domestic capital the economy eventually grows faster than is socially optimal.