Elites Behaving Badly

42 Pages Posted: 16 Apr 2011

See all articles by Johannes W. Fedderke

Johannes W. Fedderke

Pennsylvania State University - School of International Affairs

Chandana Kularatne

University of Cape Town - Faculty of Commerce - School of Economics

Date Written: November 1, 2010

Abstract

This paper presents a model to account for the behaviour of social elites, in terms of their decisions to distribute resources between themselves, and a mass of disadvantaged members of society. Privileged members of society have the opportunity to allocate resources either to improve their own productive capacity, or to enhance the productive capacity of the disadvantaged. Redistribution in favour of the disadvantaged increases the productive capacity of society, but comes at the cost of rising political aspirations of the poor, which erodes the power of the elite. The paper derives conditions under which (a) the elite will redistribute to the point of equality with the disadvantaged; (b) conditions under which the disadvantaged are subject to extreme forms of extraction by the elite; as well as (c) the range of intermediate redistributive activity likely to be employed by the privileged. Examination of empirical evidence suggests that the model generalizes across the experience of a panel of 102 countries.

Keywords: elite behaviour, disadvantaged population groups, redistribution, human capital, productivity, development

JEL Classification: O43, O15, O11

Suggested Citation

Fedderke, Johannes W. and Kularatne, Chandana, Elites Behaving Badly (November 1, 2010). Available at SSRN: https://ssrn.com/abstract=1809867 or http://dx.doi.org/10.2139/ssrn.1809867

Johannes W. Fedderke (Contact Author)

Pennsylvania State University - School of International Affairs ( email )

Lewis Katz Building
University Park, PA 16802
United States

HOME PAGE: http://sia.psu.edu/faculty/johannes_fedderke

Chandana Kularatne

University of Cape Town - Faculty of Commerce - School of Economics ( email )

Rondebosch
Cape Town, 7700
South Africa

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