Model Uncertainty, Political Learning, And Institutions: A Broader View on Mancur Olson's Theory of Institutional Sclerosis (Symposium‪)‬

1. Introduction Twenty-five years ago, Mancur Olson published his monograph on the Rise and Decline of Nations. Therein he argues that countries that have been politically stable for a long time suffer from institutional sclerosis. This sclerosis is caused by the growing political influence of so-called distributional coalitions. Their search for rents leads to increasing complexity in regulation and larger governments and reduces society's ability to adjust to changes in technologies and the economic environment. In the long run, declining rates of economic growth are the result. Olson's Rise and Decline of Nations marked a milestone in the research on the political economy of growth and inspired a large body of literature. In particular, the fact that he provided a number of testable hypotheses invited many scientists for empirical testing (among others, Choi 1983; Murrell 1984; McCallum and Blais 1987; Gray and Lowery 1988; Tang and Hedley 1998; Bischoff 2003) and still invites more testing (Mueller 2003). The existing empirical evidence is mixed and provides only limited support for Olson's theory.