Escaping the trap of 'blocking': a kinetic model linking economic development and political competition

TL;DR

This paper introduces a kinetic model linking political competition and economic liberalization, revealing complex, non-linear interactions that can explain phenomena like innovation blocking and economic stagnation.

Contribution

It develops a mesoscopic kinetic model that captures the complex dynamics between political competition and economic reforms, aligning with established macroscopic models.

Findings

Non-monotonous relationship between liberalization and political competition

Emergent phenomena from socio-economic interactions

Model reproduces stylized facts of previous macroscopic models

Abstract

In this paper we present a kinetic model with stochastic game-type interactions, analyzing the relationship between the level of political competition in a society and the degree of economic liberalization. The above issue regards the complex interactions between economy and institutional policies intended to introduce technological innovations in a society, where technological innovations are intended in a broad sense comprehending reforms critical to production. A special focus is placed on the political replacement effect described in a macroscopic model by Acemoglu and Robinson (AR-model, henceforth), which can determine the phenomenon of innovation 'blocking', possibly leading to economic backwardness. One of the goals of our modelization is to obtain a mesoscopic dynamical model whose macroscopic outputs are qualitatively comparable with stylized facts of the AR-model. A set of numerical solutions is presented showing the non monotonous relationship between economic liberization and political competition, which can be considered as an emergent phenomenon of the complex socio-economic interaction dynamic.