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The Simple Analytics of Elite Behaviour Under Limited State Capacity

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  • François Bourguignon

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Thierry Verdier

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPR - Center for Economic Policy Research)

Abstract

This chapter 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 chapter also discusses how the incentives for state capacity building are affected by political threats of power shifting

Suggested Citation

  • François Bourguignon & Thierry Verdier, 2012. "The Simple Analytics of Elite Behaviour Under Limited State Capacity," Post-Print hal-00813062, HAL.
    • Handle: RePEc:hal:journl:hal-00813062
    DOI: 10.1093/acprof:oso/9780199659036.001.0001
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    Cited by:

    1. David Juárez-Luna & Christian Ghiglino, 2014. "Elite capture of democratic politics: the role of social identity," Working Papers DTE 573, CIDE, División de Economía.
    2. Arthur Silve, 2018. "Asset Complementarity, Resource Shocks, and the Political Economy of Property Rights," Journal of Conflict Resolution, Peace Science Society (International), vol. 62(7), pages 1489-1516, August.
    3. Razafindrakoto, Mireille & Roubaud, François & Rua, Linda, 2021. "Hyper-elites and network: Capturing the powerful upper tail in Madagascar," World Development, Elsevier, vol. 147(C).
    4. Mauricio C√°rdenas & Marcela Eslava & Santiago RamÔøΩrez, 2013. "Do Modern-Time Wars Make States? Panel Data Evidence," Documentos CEDE 11939, Universidad de los Andes, Facultad de Economía, CEDE.
    5. repec:esx:essedp:751 is not listed on IDEAS
    6. David Juárez-Luna & Christian Ghiglino, 2014. "Elite capture of democratic politics: the role of social identity," Working papers DTE 573, CIDE, División de Economía.
    7. Thierry Verdier, 2010. "Ouverture, conflits et capacité étatique : une perspective d’économie politique," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(4), pages 415-449.

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