Self serving dictators and economic growth自私的独裁者和经济增长.pdfVIP

+Model ARTICLE IN PRESS JEBO-2150; No. of Pages 14 Journal of Economic Behavior Organization xxx (2007) xxx–xxx Self-serving dictators and economic growth Daniel Haile a , Abdolkarim Sadriehb , Harrie A.A. Verbon a,∗ a Tilburg University, Department of Economics, Tilburg University, P.O. Box 90153, 5000 LE Tilburg, The Netherlands b University of Magdeburg, Faculty of Economics and Management, P.O. Box 4120, 39106 Magdeburg, Germany Received 6 June 2006; received in revised form 12 September 2007; accepted 14 September 2007 Abstract We study the effect of fair institutions on growth. In our model, individuals are endowed with unequal entitlements to the economy’s output. They can free-ride or cooperate. Cooperation is individually costly, but increases aggregate output and growth. Experimentally, we observe significantly less cooperation, when dictators chose high instead of low inequality. This effect is not observed when the degree of inequality is chosen randomly. Simple cross-country regressions provide basic macroeconomic support for interaction effects between the degree and the genesis of inequality. We conclude that economies granting equal opportunities are less likely to suffer retarded growth due to free-riding than economies with self-serving dictators. © 2007 Published by Elsevier B.V. JEL classification: C91; D60; K40; O40; P51 Keywords: Inequality; Fair procedures; Corruption; Dynamic public goods game; Institutional design 1. Introduction The growth of an economy depends, amongst other factors, on the amount of effort that the individuals provide in the production and development processes. When individual effort contributions create positive externalities for the entire economy (e.g. through technological spillove