The Control of Politicians in Divided Societies: The Politics of Fear
AbstractAutocrats in many developing countries have extracted enormous personal rents from power. In addition, they have imposed inefficient policies including pervasive patronage spending. I present a model in which the presence of ethnic identities and the absence of institutionalized succession processes allow the ruler to elicit support from a sizeable share of the population despite large reductions in welfare. The fear of falling under an equally inefficient and venal ruler that favors another group is enough to discipline supporters. The model predicts extensive use of patronage, ethnic bias in taxation and spending patterns and unveils a new mechanism through which economic frictions translate into increased rent extraction by the leader. These predictions are consistent with the experiences of bad governance, ethnic bias, wasteful policies and kleptocracy in post-colonial Africa.
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Date of creation: Oct 2006
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Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- 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
This paper has been announced in the following NEP Reports:
- NEP-AFR-2006-10-14 (Africa)
- NEP-ALL-2006-10-14 (All new papers)
- NEP-CDM-2006-10-14 (Collective Decision-Making)
- NEP-PBE-2006-10-14 (Public Economics)
- NEP-POL-2006-10-14 (Positive Political Economics)
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