Abstract:
In this paper we combine Acemoglu's model of the economic origins of democracy with
Lohmann's model of political mass protest. This alllows us to provide an analysis of the
economic causes of political regime change based on the microfoundations of rebellion. We
are able to derive conditons under which democracy arises peacefully, when it occurs only
after a violent rebellion, and when oligarchy persists. We model these posibilities in a world
of asymmetric information where information cascades are possible, and where these cascades
may involve errors in a paratian sense.