Events at CERGE-EI

Prof. David K. Levine

European University Institute, Florence, Italy

Authors: David K. Levine and Salvatore Modica

Abstract: In a model of evolution driven by conflict between societies more powerful states have an advantage. When the influence of outsiders is small we show that this results in a tendency to hegemony. In a simple example in which institutions differ in their exclusiveness we find that these hegemonies will be inefficiently extractive in the sense of having inefficiently high taxes, high compensation for state officials, and low welfare. The theory also predicts that they are most likely overthrown by fanatic bands who maximize power ignoring incentive constraints.

Full Text:  “Conflict, Evolution, Hegemony, and the Power of the State”