The Simple Analytics of Elite Behaviour Under Limited State Capacity

François Bourguignon and Thierry Verdier

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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

Date: 2012
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Published in Alice H. Amsden, Alisa DiCaprio, Alice DiCaprio, James A. Robinson. The Role of Elites in Economic Development, Oxford University Press, pp.251-, 2012, 9780199659036. ⟨10.1093/acprof:oso/9780199659036.001.0001⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00813062

DOI: 10.1093/acprof:oso/9780199659036.001.0001

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