The Effect of Political Systems on Economic Performance in Resource-Rich Countries

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Hosseini, Mohammad | 2009

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 39452 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Nili, Farhad; Nili, Masoud
Abstract:
In this research, the effect of political system on economic performance of resource abundant countries is studied. We use political economy litreture to develop a theoritical model in this issue. Here, the politcal systems are divided to democracy and dictatory and in each of them other institutional variable will be introduced. Policy indicator is based on the difference between social welfare in each situation and its optimal amount when maximized. We show that if democracy does not come with high accountability it reduces social welfare more than dictatory. Also, if politician are myopic, democracy aggravates economic performance in those countries. In addition, easy access to income rents and weakness of tax system can undermine the social welfare. Another result of this research is that absolute power of dictator and political advantage in election facilitate rent seeking behavior in politicians
Keywords:
Social Welfare ; Natural Resource Curse ; Political Regim ; Tax System

No TOC