Economic Backwardness in Political Perspective

Daron Acemoglu and James Robinson

No 8831, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We construct a simple model where political elites may block technological and institutional development, because of a 'political replacement effect'. Innovations often erode elites' incumbency advantage, increasing the likelihood that they will be replaced. Fearing replacement, political elites are unwilling to initiate change, and may even block economic development. We show that elites are unlikely to block development when there is a high degree of political competition, or when they are highly entrenched. It is only when political competition is limited and also their power is threatened that elites will block development. We also show that such blocking is more likely to arise when political stakes are higher, and that external threats may reduce the incentives to block. We argue that this model provides an interpretation for why Britain, Germany and the U.S. industrialized during the nineteenth century, while the landed aristocracy in Russia and Austria-Hungary blocked development.

JEL-codes: H2 N10 (search for similar items in EconPapers)
Date: 2002-03
New Economics Papers: this item is included in nep-lam, nep-mic and nep-pke
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (83)

Published as Acemoglu, Daron and James Robinson. "Economic Backwardness in Political Perspective." American Political Science Review 100 (February 2006): 115-131.

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Journal Article: Economic Backwardness in Political Perspective (2006)
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