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 U.S. industrialized during the nineteenth century, while the landed aristocracy in Russia and Austria-Hungary blocked development.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8831.
Date of creation: Mar 2002
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Publication status: published as Acemoglu, Daron and James Robinson. "Economic Backwardness in Political Perspective." American Political Science Review 100 (February 2006): 115-131.
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- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-04-15 (All new papers)
- NEP-LAM-2002-04-03 (Central & South America)
- NEP-MIC-2002-04-15 (Microeconomics)
- NEP-PKE-2002-04-15 (Post Keynesian Economics)
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