Public finance in autocratic process: An empirical note

Abstract

One of the ironies of modern public choice theory is that it has had comparatively little to say about the particular form of government which has exhibited the highest rate of growth since World War II and today controls most of the world's population, dictatorship (a term referring to non-democratic governments in general). The analysis of democracy is of course important and interesting in its own right, but obviously, models of political behavior which assume democratic decision-making structures are largely irrelevant in a context where the government rules by decree and maintains itself in power by military force. While Tullock (1986) has recently argued that various problems such as majority cycling phenomena should be applicable to conditions of autocracy (in particular, in relation to the coup d'etat as an 'election' faced by dictators), the overwhelming bulk of the literature has been rather narrowly applied to the context of actual voting in democracies. This emphasis on the analysis of democratic process is understandable given that most public choice theorists are citizens of democracies. It is also the case that most Western developed countries are democratic in their political organization, and collectively generate higher economic output than nondemocracies. Nevertheless, dictatorship (a term for all non-democratic forms of government) remains something of a modern growth industry and represents a phenomena in need of explanation. Past research has largely failed to provide a convincing explanation of variations across nations in terms of the democracy non-democracy dichotomy. There is general agreement that the presence of democracy is highly correlated with the level of per capita income, but the direction of causality is unclear; many writers (e.g., Hayek, 1960) argue that economic growth is a function of economic freedom, and the latter requires stable and free (democratic) government. On the other hand, Auster and Silver (1979) have suggested that