The Emergence of Weak, Despotic and Inclusive States / Daron Acemoglu, James A. Robinson.

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Acemoglu, Daron

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w23657.Publication details: Cambridge, Mass. National Bureau of Economic Research 2017.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Societies under similar geographic and economic conditions and subject to similar external influences nonetheless develop very different types of states. At one extreme are weak states with little capacity and ability to regulate economic or social relations. At the other are despotic states which dominate civil society. Yet there are others which are locked into an ongoing competition with civil society and it is these, not the despotic ones, that develop the greatest capacity. We develop a dynamic contest model of the potential competition between state (controlled by a ruler or a group of elites) and civil society (representing non-elite citizens), where both players can invest to increase their power. The model leads to different types of steady states depending on initial conditions. One type of steady state, corresponding to a weak state, emerges when civil society is strong relative to the state (e.g., having developed social norms limiting political hierarchy). Another type of steady state, corresponding to a despotic state, originates from initial conditions where the state is powerful and civil society is weak. A third type of steady state, which we refer to as an inclusive state, emerges when state and civil society are more evenly matched. In this case, each party has greater incentives to invest to keep up with the other, and this leads to the most powerful and capable type of state, while simultaneously incentivizing civil society to be equally powerful as well. Our framework highlights that comparative statics with respect to structural factors such as geography, economic conditions or external threats, are conditional -- in the sense that depending on initial conditions they can shift a society into or out of the basin of attraction of the inclusive state.

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Previous	nber w23654 Which Banks Recover From Large Adverse Shocks? /	nber w23655 Consumption and Income Inequality in the U.S. Since the 1960s /	nber w23656 The Uptick in Income Segregation: Real Trend or Random Sampling Variance /	nber w23657 The Emergence of Weak, Despotic and Inclusive States /	nber w23658 The Tradeoffs in Leaning Against the Wind /	nber w23659 Sympathy for the Diligent and the Demand for Workfare /	nber w2366 Firm Characteristics, Unanticipated Inflation, and Stock Returns /	Next

August 2017.

Societies under similar geographic and economic conditions and subject to similar external influences nonetheless develop very different types of states. At one extreme are weak states with little capacity and ability to regulate economic or social relations. At the other are despotic states which dominate civil society. Yet there are others which are locked into an ongoing competition with civil society and it is these, not the despotic ones, that develop the greatest capacity. We develop a dynamic contest model of the potential competition between state (controlled by a ruler or a group of elites) and civil society (representing non-elite citizens), where both players can invest to increase their power. The model leads to different types of steady states depending on initial conditions. One type of steady state, corresponding to a weak state, emerges when civil society is strong relative to the state (e.g., having developed social norms limiting political hierarchy). Another type of steady state, corresponding to a despotic state, originates from initial conditions where the state is powerful and civil society is weak. A third type of steady state, which we refer to as an inclusive state, emerges when state and civil society are more evenly matched. In this case, each party has greater incentives to invest to keep up with the other, and this leads to the most powerful and capable type of state, while simultaneously incentivizing civil society to be equally powerful as well. Our framework highlights that comparative statics with respect to structural factors such as geography, economic conditions or external threats, are conditional -- in the sense that depending on initial conditions they can shift a society into or out of the basin of attraction of the inclusive state.