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Explaining Africa's Growth Tragedy: A Theoretical Model of Dictatorship and Kleptocracy

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Author Info
Yuan K. Chou
Hayat Khan

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Abstract

In this paper, we construct a dynamic model of a kleptocratic dictatorship to explain sub-Saharan Africa’s dismal economic performance between the early 1970s and the mid-1990s. The dictator’s objective is to maximize a discounted stream of revenue generated through theft of the economy’s output by choosing the optimal expropriation rate and the size of the security force employed to enforce his rule. The model is used to evaluate alternative intervention options open to developed countries such as unconditional, conditional and selective foreign aid, financial and military assistance to rebel groups, as well as medical relief to combat the HIV/AIDs pandemic.

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File URL: http://www.economics.unimelb.edu.au/SITE/research/workingpapers/wp04/922.pdf
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Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 922.

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Length: 40 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:mlb:wpaper:922

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Related research
Keywords: Economic performance; dictatorship; foreign aid; Africa;

Find related papers by JEL classification:
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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  1. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," The Journal of Development Studies, Taylor and Francis Journals, vol. 37(6), pages 17-41, August. [Downloadable!] (restricted)
  2. John Sender, 1999. "Africa's Economic Performance: Limitations of the Current Consensus," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 89-114, Summer. [Downloadable!] (restricted)
  3. Craig Burnside & David Dollar, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September. [Downloadable!] (restricted)
    Other versions:
  4. Benno J. Ndulu & Stephen A. O'Connell, 1999. "Governance and Growth in Sub-Saharan Africa," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 41-66, Summer. [Downloadable!] (restricted)
  5. Overland, Jody & Simons, Kenneth L & Spagat, Michael, 2000. "Political Instability and Growth in Dictatorships," CEPR Discussion Papers 2653, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Collier, Paul & Dollar, David, 2000. "Can the world cut poverty in half ? how policy reform and effective aid can meet international development goals," Policy Research Working Paper Series 2403, The World Bank. [Downloadable!]
    Other versions:
  8. Paul Collier & Jan Willem Gunning, 1999. "Explaining African Economic Performance," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 64-111, March. [Downloadable!] (restricted)
    Other versions:
  9. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer. [Downloadable!] (restricted)
  10. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February. [Downloadable!] (restricted)
  11. William Easterly & Ross Levine & David Roodman, 2003. "New Data, New Doubts: Revisiting "Aid, Policies, and Growth"," Working Papers 26, Center for Global Development. [Downloadable!]
  12. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April. [Downloadable!] (restricted)
  13. Levy, Victor, 1988. "Aid and growth in Sub-Saharan Africa: The recent experience," European Economic Review, Elsevier, vol. 32(9), pages 1777-1795, November. [Downloadable!] (restricted)
  14. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages F191-F216, 06. [Downloadable!] (restricted)
    Other versions:
  15. Maurice Obstfeld., 1998. "Foreign Resource Inflows, Saving, and Growth," Center for International and Development Economics Research (CIDER) Working Papers C98-099, University of California at Berkeley.
  16. Paul Mosley & John Hudson & Arjan Verschoor, 2004. "Aid, Poverty Reduction and the 'New Conditionality'," Economic Journal, Royal Economic Society, vol. 114(496), pages F217-F243, 06. [Downloadable!] (restricted)
  17. Baizhu Chen & Yi Feng, 1999. "Economic development and the transition to democracy a formal model," Social Choice and Welfare, Springer, vol. 16(1), pages 1-16. [Downloadable!] (restricted)
  18. Banerjee, Abhijit V, 1997. "A Theory of Misgovernance," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1289-1332, November.
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