EconPapers    
Economics at your fingertips  
 

Persistence of Power, Elites and Institutions

Daron Acemoglu and James Robinson

No 5603, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We construct a model of simultaneous change and persistence in institutions. The model consists of landowning elites and workers, and the key economic decision concerns the form of economic institutions regulating the transaction of labour (e.g., competitive markets versus labour repression). The main idea is that equilibrium economic institutions are a result of the exercise of de jure and de facto political power. A change in political institutions, for example a move from non-democracy to democracy, alters the distribution of de jure political power, but the elite can intensify their investments in de facto political power, such as lobbying or the use of paramilitary forces, to partially or fully offset their loss of de jure power. In the baseline model, equilibrium changes in political institutions have no effect on the (stochastic) equilibrium distribution of economic institutions, leading to a particular form of persistence in equilibrium institutions, which we refer to as invariance. When the model is enriched to allow for limits on the exercise of de facto power by the elite in democracy or for costs of changing economic institutions, the equilibrium takes the form of a Markov regime-switching process with state dependence. Finally, when we allow for the possibility that changing political institutions is more difficult than altering economic institutions, the model leads to a pattern of captured democracy, whereby a democratic regime may survive, but choose economic institutions favouring the elite. The main ideas featuring in the model are illustrated using historical examples from the US South, Latin America and Liberia.

Keywords: Democracy; De facto power; De jure power; Dictatorship; Elites; Institutions; Labour repression; Persistence; Political economy (search for similar items in EconPapers)
JEL-codes: H2 N10 N40 P16 (search for similar items in EconPapers)
Date: 2006-03
New Economics Papers: this item is included in nep-pbe, nep-pke and nep-pol
References: Add references at CitEc
Citations: View citations in EconPapers (57) Track citations by RSS feed

Downloads: (external link)
https://cepr.org/publications/DP5603 (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:
Journal Article: Persistence of Power, Elites, and Institutions (2008) Downloads
Working Paper: Persistence of Power, Elites and Institutions (2006) Downloads
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:5603

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP5603

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 ().

 
Page updated 2024-02-01
Handle: RePEc:cpr:ceprdp:5603