Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121049
Authors: 
Dadasov, Ramin
Harms, Philipp
Lorz, Oliver
Year of Publication: 
2010
Series/Report no.: 
FIW Working Paper 48
Abstract: 
This paper analyzes the influence of financial integration on institutional quality. We construct a dynamic political-economic model of an autocracy in which a ruling elite uses its political power to expropriate the general population. Although financial integration reduces capital costs for entrepreneurs and thereby raises gross incomes in the private sector, the elite may counteract this effect by increasing the level of expropriation. Since de facto political power is linked to economic resources, financial integration also has long-run consequences for the distribution of power and for the rise of an entrepreneurial class.
Subjects: 
Institutions
Capital Mobility
Political Economy
JEL: 
F21
O16
P48
Document Type: 
Working Paper

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