Institutional change and political conflict in a structuralist model

Abstract External conditions have historically influenced economic outcomes and also impacted political institutions in developing countries. Focusing on these changes, this article develops a theoretical model of conflict democratic stability small open economy, using as the basis structuralist macroeconomic model. In model, are given medium run but vary long result between capitalists, formal workers, informal workers excluded from benefits social protection. The suggests that breakdown is more likely larger sector, lower structural competitiveness weaker country’s tradition. links possibility coups democratization process with external shocks. Based mainly Latin American experience dictatorial regimes, claims combining industrial technological policies—which ease Balance-of-Payments constraint—with building comprehensive system protection key for consolidation democracy.