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

34 Pages Posted: 15 Dec 2003

See all articles by Daron Acemoglu

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)

Multiple version iconThere are 3 versions of this paper

Date Written: July 2003

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. We argue that the success of kleptocrats rests, in part, on their ability to use a "divide-and-rule" strategy, made possible by weakness of the institutions in these societies. Members of society need to cooperate in order to depose a kleptocrat, yet such cooperation may be defused 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 the collective action problem can be intensified by threats which remain off the equilibrium path. In equilibrium, all are exploited and no one challenges the kleptocrat. Kleptocratic policies are more likely when foreign aid and rents from natural resources provide rulers with substantial resources to buy off opponents; when opposition groups are shortsighted; when the average productivity in the economy is low; and when there is greater inequality between producer groups (because more productive groups are more difficult to buy off).

Keywords: dictatorship, divide-and-rule, economic development, institutions, kleptocracy, personal rule, political economy

JEL Classification: O12, H00

Suggested Citation

Acemoglu, Daron and Robinson, James A. and Verdier, Thierry, Kleptocracy and Divide-and-Rule: A Model of Personal Rule (July 2003). MIT Department of Economics Working Paper No. 03-39. Available at SSRN: https://ssrn.com/abstract=471821 or http://dx.doi.org/10.2139/ssrn.471821

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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James A. Robinson

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Thierry Verdier

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Centre for Economic Policy Research (CEPR)

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