Economic Backwardness in Political Perspective
AbstractWe construct a simple model where political elites may block technological and institutional development, because of a ‘political replacement effect.’ Innovations often erode elites’ incumbency advantage, increasing the likelihood that they will be replaced. Fearing replacement, political elites are unwilling to initiate change, and may even block economic development. We show that elites are unlikely to block development when there is a high degree of political competition, or when they are highly entrenched. It is only when political competition is limited and also their power is threatened that elites will block development. We also show that such blocking is more likely to arise when political stakes are higher, and that external threats may reduce the incentives to block. We argue that this model provides an interpretation for why Britain, Germany and the US industrialized during the nineteenth century, while the landed aristocracy in Russia and Austria-Hungary blocked development.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3261.
Date of creation: Mar 2002
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- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-03-14 (All new papers)
- NEP-DEV-2003-03-14 (Development)
- NEP-LAM-2003-03-14 (Central & South America)
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