The Natural Economic Advantage of Dictatorship over Democracy: A “Gresham's Law” of Governance
Martin C. McGuire and Omar Azfar
,
4
(
9
)
International Tax and Public Finance
451-463
August
2002
Abstract
We show that when democratic and autocratic governments peacefully compete for governance over the same jurisdiction the autocratic has a natural advantage. The autocratic government, which unambiguously reduces welfare for everyone except the autocrat, will drive the competing democratic government to voluntarily shut down in the interests of its own electorate.