Kleptocracy and Divide-and-Rule: A Model of Personal Rule

Thierry Verdier, Daron Acemoglu and James Robinson

No 4059, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Many developing countries have suffered under the personal rule of ?kleptocrats?, who implement highly inefficient economic policies, expropriate the wealth of their citizens, and use the proceeds for their own glorification or consumption. The incidence of kleptocracy is a serious impediment to development. Yet how do kleptocrats survive? How can they apparently exploit the entire citizenship of countries and not foment successful opposition? In this research we argue that the success of kleptocrats rests on their ability to use a particular type of political strategy, which we refer to as ?divide-and-rule?. Members of society need to cooperate in order to depose a kleptocrat. A kleptocrat, however, may defuse such cooperation by imposing punitive rates of taxation on any citizen who proposes such a move, and redistributing the benefits to those who need to agree to it. Thus kleptocrats can intensify the collective action problem by threats that remain off the equilibrium path. In equilibrium, all are exploited and no one challenges the kleptocrat because of the threat of divide-and-rule. The divide-and-rule strategy is made possible by the weakness of the institutions in these societies, and highlights the different nature of politics between strongly- and weakly-institutionalized polities. We show that foreign aid and rents from natural resources typically help kleptocratic rulers by providing them with greater resources to buy off opponents. Kleptocratic policies are also more likely to arise when opposition groups are shortsighted and when the average productivity in the economy is low. We also find that greater inequality between producer groups may constrain kleptocratic policies because more productive groups are more difficult to buy off.

JEL-codes: H00 O10 (search for similar items in EconPapers)
Date: 2003-09
New Economics Papers: this item is included in nep-hpe and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
https://cepr.org/publications/DP4059 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Kleptocracy and Divide-and-Rule: A Model of Personal Rule (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:4059

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4059

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().