Research Seminar of International Laboratory for Macroeconomic Analysis: Dmitry Veselov «Crony capitalism as an Electoral Outcome»

Dear Colleagues,

International Laboratory for Macroeconomic Analysis invite everyone to join our research seminar on the 22th of  April 2021 (Thursday) at 04:00 PM (Moscow). 

Speaker: Dmitry Veselov (ILMA, HSE)

Theme: «Crony capitalism as an Electoral Outcome»

Abstract:

Crony relations i.e. the tight connection between the owners of major firms and the government, distort competition, and are related with high entry barriers on markets. We propose a theory that explains why, in a democracy, the majority of voters may prefer this type of institutions.

This paper develops an endogenous growth model with heterogeneous agents, which differ in their skills and wealth endowment.  If the policy space is two-dimensional, the wealthy elite and low-skilled workers may form a majority coalition, supporting the regime with high-entry barriers. In this case, the wealthy elite agrees on a higher level of redistribution, preferred by the least skilled agents. We show that the high income and skill inequality result in the electoral support of crony capitalism, lower investment in education, and longer stagnation.

Working language: English

Link: https://zoom.us/j/8915494425

ID: 891 549 4425

Looking forward to see you.