Sharif Digital Repository

Economic performance of resource rich countries is related to their political systems. In this research, consistent to Hosseini (1388), we develop a theoretical model in which we classify the political systems of those countries to four systems based on corruption, myopic behavior of the incumbent, ideological bias of people, and the popularity shocks in elections. We show that in a fixed institutional framework, democracy leads to higher welfare for people and better economic performance. However, in a society with low corruption, high political convergence, and low popularity shocks both democracy and dictatorship maximize the social welfare in the model  

The formation of development-supporting economic institutions, particularly through the lens of political institutions, remains a central question in political economy. This study distinguishes two key components of political institutions—power distribution and power transition—and empirically demonstrates that power distribution has a significant positive effect on economic institutional quality, while power transition becomes statistically insignificant once power distribution is controlled for. Based on whether political power is centralized or decentralized and whether its transfer is democratic or non-democratic, we define four political regimes: decentralized democracy, centralized...