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The Simple Analytics of Elite Behaviour Under Limited State Capacity

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  • Bourguignon, Francois
  • Verdier, Thierry

Abstract

This paper discusses the issue of taxation and redistribution in economies dominated by Elites with limited state capacity. Within a simple aggregate framework, we discuss the political economy incentives of Elites to tax, redistribute and increase state capacity. In particular, the analysis highlights the role of complementarities or substitutability in the production process between the factors controlled by the Elite and other social groups and shows the existence of natural increasing returns for Elites to increase state capacity. The paper also discusses how the incentives for state capacity building are affected by political threats of power shifting.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/wp2010/wp2010-104.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number wp2010-104.

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Length: 30 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:unu:wpaper:wp2010-104

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Keywords: Elites; redistribution; political economy; state capacity building;

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  1. Francesco Caselli & Wilbur John Coleman II, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June.
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