The Violence Trap: A Political-Economic Approach to the Problems of Development

30 Pages Posted: 22 Dec 2013 Last revised: 14 Feb 2015

See all articles by Gary W. Cox

Gary W. Cox

Stanford University

Douglass C. North

Washington University in St. Louis - Department of Economics

Barry R. Weingast

Stanford University, Department of Political Science

Date Written: February 13, 2015

Abstract

Why do developing countries fail to adopt the institutions and policies that promote development? Our answer is the violence trap. Key political reforms — opening access and reducing rents — are typically feasible only when the domestic economy reaches a given level of complexity (for reasons we specify); yet complex economies typically can emerge only when key political reforms are already in place (for standard reasons). The interdependence of political reform and economic complexity entails violence because, as we show, unreformed polities lack adaptive efficiency. The literature sparked by Lipset’s modernization thesis has operationalized “economic development” as a higher GDP per capita. Building on Steuart, we view development as creating a more complex economy whose workings will be more seriously disrupted by political violence. Empirically, we show that economic complexity (as measured by the Hidalgo-Hausmann index) strongly deters coups, even controlling for GDP per capita and level of democracy.

Keywords: violence, violence trap, poverty trap, economic and political development, economic growth, performance of government, property rights, institutions

Suggested Citation

Cox, Gary W. and North, Douglass C. and Weingast, Barry R., The Violence Trap: A Political-Economic Approach to the Problems of Development (February 13, 2015). Available at SSRN: https://ssrn.com/abstract=2370622 or http://dx.doi.org/10.2139/ssrn.2370622

Gary W. Cox

Stanford University ( email )

Stanford, CA 94305
United States
650-723-4278 (Phone)

Douglass C. North

Washington University in St. Louis - Department of Economics ( email )

One Brookings Drive
St. Louis, MO 63130
United States
314-935-5809 (Phone)
Not Available (Fax)

Barry R. Weingast (Contact Author)

Stanford University, Department of Political Science ( email )

Stanford, CA 94305-6010
United States
650-723-0497 (Phone)
650-723-1808 (Fax)

HOME PAGE: http://https://www.stanford.edu/group/mcnollgast/cgi-bin/wordpress/

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