The Violence Trap: A Political-Economic Approach to the Problems of Development
30 Pages Posted: 22 Dec 2013 Last revised: 14 Feb 2015
Date Written: February 13, 2015
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
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