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《《eScholarship UC item 2rj6p432》.pdf
University of California
Peer Reviewed
Title:
The Economics of Autocracy and Majority Rule
Author:
MCGUIRE, MARTIN C, University of California, Irvine
Olson, Mancur L Jr, University of Maryland
Publication Date:
03-01-1996
Publication Info:
Postprints, UC Irvine
Permalink:
/uc/item/2rj6p432
Additional Info:
Copyright 1996, American Economic Association. Journal of Economic Literature, Vol. XXXIV
(March 1996), pp. 72–96.
Original Citation:
Martin C. McGuire and Mancur L. Olson: The Economics of Autocracy and Majority Rule: The
Invisible Hand and the Use of Force, Journal of Economic Literature, Vol. XXXIV (March 1996)
pp. 72–96
Keywords:
Governance, Autocracy, Democracy, Property Rights, Income Distribution
Abstract:
Productive public good investment allocations, and group discriminatory redistributions are
conflicting resource use options between which every government must choose irrespective of
its political make up. This paper is the first to derive an incisive explanation of how governments
combine political and economic calculation to balance these competing choices. The political logic
of these economic decisions will lie on a spectrum between two polar extremes. At one extremes
is an idealized, utopian, consensual democracy. At the other extreme is perfect autocracy ruled by
a dictator who taxes and spends solely to satisfy his own selfish desires. Realistic societies can be
analyzed as a mixture -- a weighted sum -- of these two polar cases. Thus, in making the choice
between social investment and redistributive taxation from the powerless to the powerful, every
government behaves somewhat like an pure democracy and somewhat like a selfish dictatorship
eScholarship provides open access, scholarly publishing
services to the Univers
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