Kleptocracy and Divide-and-Rule: A Model of Personal Rule / Daron Acemoglu, James A. Robinson, Thierry Verdier.

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Acemoglu, Daron

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w10136.Publication details: Cambridge, Mass. National Bureau of Economic Research 2003.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Many developing countries have suffered under the personal rule of kleptocrats', who implement highly inefficient economic policies, expropriate the wealth of their citizens, and use the proceeds for their own glorification or consumption. We argue that the success of kleptocrats rests, in part, on their ability to use a divide-and-rule' strategy, made possible by weaknesses in the institutions in these societies. Members of society need to cooperate in order to depose a kleptocrat, yet such cooperation may be defused by imposing punitive rates of taxation on any citizen who proposes such a move, and redistributing the benefits to those who need to agree to it. Thus the collective action problem can be intensified by threats which remain off the equilibrium path. In equilibrium, all are exploited and no one challenges the kleptocrat. Kleptocratic policies are more likely when foreign aid and rents from natural resources provide rulers with substantial resources to buy off opponents; when opposition groups are shortsighted; when the average productivity in the economy is low; and when there is greater inequality between producer groups (because more productive groups are more difficult to buy off).

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w10136 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w10133 Entrant Experience and Plant Exit /	nber w10134 Does Child Labor Decline with Improving Economic Status? /	nber w10135 Competitive Risk Sharing Contracts with One-Sided Commitment /	nber w10136 Kleptocracy and Divide-and-Rule: A Model of Personal Rule /	nber w10137 The Use of Literature Based Elasticity Estimates in Calibrated Models of Trade-Wage Decompositions: A Calibmetric Approach /	nber w10138 Regeneration, Labour Supply and the Welfare Costs of Taxes /	nber w10139 A Simulation-Based Welfare Loss Calculation for Labor Taxes with Piecewise-Linear Budgets /	Next

December 2003.

Many developing countries have suffered under the personal rule of kleptocrats', who implement highly inefficient economic policies, expropriate the wealth of their citizens, and use the proceeds for their own glorification or consumption. We argue that the success of kleptocrats rests, in part, on their ability to use a divide-and-rule' strategy, made possible by weaknesses in the institutions in these societies. Members of society need to cooperate in order to depose a kleptocrat, yet such cooperation may be defused by imposing punitive rates of taxation on any citizen who proposes such a move, and redistributing the benefits to those who need to agree to it. Thus the collective action problem can be intensified by threats which remain off the equilibrium path. In equilibrium, all are exploited and no one challenges the kleptocrat. Kleptocratic policies are more likely when foreign aid and rents from natural resources provide rulers with substantial resources to buy off opponents; when opposition groups are shortsighted; when the average productivity in the economy is low; and when there is greater inequality between producer groups (because more productive groups are more difficult to buy off).