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Declining Predation during Development: a Feedback Process

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  • Carlos Bethencourt
  • Fernando Perera-Tallo

Abstract

type="main" xml:id="ecca12105-abs-0001"> Empirical evidence suggests that poorer countries have larger amounts of predation. We formulate a neoclassical growth model in which agents devote time to either produce or predate. When the elasticity of substitution between labour and capital is lower than one, the labour share rises with capital, reducing the incentive to predate and increasing the incentive to produce throughout the transition. Consequently, a feedback process between capital accumulation and predation arises, which amplifies income differences generated by differences in productivity. This paper helps to explain why differences between countries have remained stable and the key role that institutions play in development.

Suggested Citation

  • Carlos Bethencourt & Fernando Perera-Tallo, 2015. "Declining Predation during Development: a Feedback Process," Economica, London School of Economics and Political Science, vol. 82(326), pages 253-294, April.
    • Handle: RePEc:bla:econom:v:82:y:2015:i:326:p:253-294
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    File URL: http://hdl.handle.net/10.1111/ecca.2015.82.issue-326
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The richer we are, the less crime there is
      by Economic Logician in Economic Logic on 2012-11-12 21:23:00

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    Cited by:

    1. Fernando del Río, 2021. "The impact of rent seeking on social infrastructure and productivity," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1741-1760, August.
    2. del Río, Fernando, 2018. "Governance, social infrastructure and productivity," MPRA Paper 86245, University Library of Munich, Germany, revised 16 Apr 2018.
    3. Carlos Bethencourt & Fernando Perera‐Tallo, 2020. "On the relationship between sectorial and institutional structural changes," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 533-565, July.

    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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