Kleptocracy and divide-and-rule
Subtitle: a model of personal rule
By: [by] Daron Acemoglu, James Robinson [and] Thierry Verdier
Contributors: Robinson, James A., 1960-; Verdier, Thierry, 1961-; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 03-39; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 03-39.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2003
Place of publication: Cambridge, MA
Language: eng
Number of pages: 32
Description: 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 Classifications: O12, H00.
Notes: "July 2003."

Includes bibliographical references (p. 29-32).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.