Abstract

http://ssrn.com/abstract=467481
 
 

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


Daron Acemoglu


Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

James A. Robinson


Harvard University - Department of Government; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Thierry Verdier


Paris School of Economics (PSE); Delta - Ecole Normale Superieure (ENS); Centre for Economic Policy Research (CEPR)

September 2003

CEPR Discussion Paper No. 4059

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.

Number of Pages in PDF File: 40

JEL Classification: H00, O10

working papers series


Date posted: November 13, 2003  

Suggested Citation

Acemoglu, Daron and Robinson, James A. and Verdier, Thierry, Kleptocracy and Divide-and-Rule: A Model of Personal Rule (September 2003). CEPR Discussion Paper No. 4059. Available at SSRN: http://ssrn.com/abstract=467481

Contact Information

Daron Acemoglu (Contact Author)
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
Room E52-380b
Cambridge, MA 02142
United States
617-253-1927 (Phone)
617-253-1330 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
James A. Robinson
Harvard University - Department of Government ( email )
1737 Cambridge Street
Cambridge, MA 02138
United States
617-496-2839 (Phone)
617-495-8292 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Thierry Verdier
Paris School of Economics (PSE) ( email )
48 Boulevard Jourdan
Paris, 75014
France
Delta - Ecole Normale Superieure (ENS) ( email )
48, Boulevard Jourdan
75014 Paris
France
+33 1 4313 6308 (Phone)
+33 1 4313 6310 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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