Political Predation and Economic Development

23 Pages Posted: 8 Jun 2009

See all articles by Jean-Paul Azam

Jean-Paul Azam

University of Toulouse I - Advanced Research in Quantitative Applied Development Economics (ARQADE)

Robert Bates

Harvard University - Department of Government

Bruno Biais

Centre for Economic Policy Research (CEPR)

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Abstract

We analyze a game between citizens and governments, whose type (benevolent or predatory) is unknown to the public. Opportunistic governments mix between predation and restraint. As long as restraint is observed, political expectations improve, people enter the modern sector, and the economy grows. Once there is predation, the reputation of the government is ruined and the economy collapses. If citizens are unable to overthrow this government, the collapse is durable. Otherwise, a new government is drawn and the economy can rebound. Consistent with stylized facts, equilibrium political and economic histories are random, unstable, and exhibit long-term divergence.

Suggested Citation

Azam, Jean-Paul and Bates, Robert and Biais, Bruno, Political Predation and Economic Development. Economics & Politics, Vol. 21, No. 2, pp. 255-277, July 2009. Available at SSRN: https://ssrn.com/abstract=1415087 or http://dx.doi.org/10.1111/j.1468-0343.2009.00345.x

Jean-Paul Azam

University of Toulouse I - Advanced Research in Quantitative Applied Development Economics (ARQADE) ( email )

21 Allee de Brienne
Toulouse, 31000
France

Robert Bates

Harvard University - Department of Government ( email )

1737 Cambridge Street
Cambridge, MA 02138
United States
617-496-0919 (Phone)
617-496-6849 (Fax)

Bruno Biais (Contact Author)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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