How Do Political Institutions Affect Sustainability?

C.Y. Cyrus Chu and Meng-Yu Liang

IEAS Working Paper No. 23-A001, April 2023

In capturing the famous collapsing case of Easter Island, we set up a model where the society’s ruler has to allocate resources between consumption goods and statue construction. Since the incumbent rulers may be addicted to the glory or pleasure of statue erection, their utility function may be alienated from that of the citizens. We analyze how sustainability may differ under democracy and autocracy regimes. We prove that when the discount factor is small (large), the democracy regime is more sustainable (both regimes are equally sustainable). When the discount factor is somewhere in between, citizens’ attitude toward state accountability plays a critical role. When citizens are “weak”, the threat of replacing a reckless ruler under democracy is not credible. We identify a narrow parameter range in which an autocrat has a strong self-discipline to prevent an environmental collapse, whereas the democracy regime performs worse.