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Autocracies and Development in a Global Economy: A Tale of Two Elites

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  • Anders Akerman

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  • Anna Larsson

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  • Alireza Naghavi

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Abstract

Data on the growth performances of countries with similar comparative (dis)advantage and political institutions reveal a striking variation across world regions. While some former autoc- racies such as the East Asian growth miracles have done remarkably well; others such as the Latin American economies have grown at much lower rates. In this paper; we propose a political economy explanation of these diverging paths of development by addressing the preferences of the country?s political elite. We build a theoretical framework where factors of production owned by the political elites di¤er across countries. In each country; the incumbent autocrat will cater to the preferences of the elites when setting trade policy and the property rights regime. We show how stronger property rights may lead to capital accumulation and labor reallocation to the manufacturing sector. This; in turn; can lead to a shift in the comparative advantage; a decision to open up to trade and an in?ow of more productive foreign capital. Consistent with a set of stylised facts on East Asia and Latin America; we argue that strong property rights are crucial for success upon globalization.

Suggested Citation

  • Anders Akerman & Anna Larsson & Alireza Naghavi, 2011. "Autocracies and Development in a Global Economy: A Tale of Two Elites," Center for Economic Research (RECent) 065, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
  • Handle: RePEc:mod:recent:065
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    Cited by:

    1. Carter, Michael & Morrow, John, 2014. "The political economy of inclusive rural growth," LSE Research Online Documents on Economics 60268, London School of Economics and Political Science, LSE Library.
    2. repec:esx:essedp:764 is not listed on IDEAS

    More about this item

    Keywords

    Autocracy; Growth; Political Elites; Landowners; Capitalists; Growth Miracles; Trade; Comparative Advantage; Capital Mobility; Property Rights;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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