Investment without democracy: Ruling-party institutionalization and credible commitment in autocracies

Journal article

Scott Gehlbach, Philip Keefer
Journal of Comparative Economics, vol. 39(2), 2011, pp. 123-139

DOI: 10.1016/j.jce.2011.04.002

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APA Click to copy
Gehlbach, S., & Keefer, P. (2011). Investment without democracy: Ruling-party institutionalization and credible commitment in autocracies. Journal of Comparative Economics, 39(2), 123–139. https://doi.org/10.1016/j.jce.2011.04.002

Chicago/Turabian Click to copy
Gehlbach, Scott, and Philip Keefer. “Investment without Democracy: Ruling-Party Institutionalization and Credible Commitment in Autocracies.” Journal of Comparative Economics 39, no. 2 (2011): 123–139.

MLA Click to copy
Gehlbach, Scott, and Philip Keefer. “Investment without Democracy: Ruling-Party Institutionalization and Credible Commitment in Autocracies.” Journal of Comparative Economics, vol. 39, no. 2, 2011, pp. 123–39, doi:10.1016/j.jce.2011.04.002.

BibTeX Click to copy

@article{gehlbach2011a,
  title = {Investment without democracy: Ruling-party institutionalization and credible commitment in autocracies},
  year = {2011},
  issue = {2},
  journal = {Journal of Comparative Economics},
  pages = {123-139},
  volume = {39},
  doi = {10.1016/j.jce.2011.04.002},
  author = {Gehlbach, Scott and Keefer, Philip}
}

Abstract

What explains private investment in autocracies, where institutions that discourage expropriation in democracies are absent? We argue that institutionalized ruling parties allow autocrats to make credible commitments to investors. Such parties promote investment by solving collective-action problems among a designated group, who invest with the expectation that the autocrat will not attempt their expropriation. We derive conditions under which autocrats want to create such parties, and we predict that private investment and governance will be stronger in their presence. We illustrate the model by examining the institutionalization of the Chinese Communist Party.