Economic Backwardness in Political Perspective

52 Pages Posted: 19 Mar 2002

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)

Multiple version iconThere are 3 versions of this paper

Date Written: February 2002

Abstract

We construct a simple model where political elites may block technological and institutional development, because of a "political replacement effect." Innovations often erode elites' incumbency advantage, increasing the likelihood that they will be replaced. Fearing replacement, political elites are unwilling to initiate change, and may even block economic development. We show that elites are unlikely to block development when there is a high degree of political competition, or when they are highly entrenched. It is only when political competition is limited and also their power is threatened that elites will block development. We also show that such blocking is more likely to arise when political stakes are higher, and that external threats may reduce the incentives to block. We argue that this model provides an interpretation for why Britain, Germany and the U.S. industrialized during the nineteenth century, while the landed aristocracy in Russia and Austria-Hungary blocked development.

Keywords: Political Economy, Institutions, Development, Industrialization

JEL Classification: H2, N10, N40, O1, O3, O4

Suggested Citation

Acemoglu, Daron and Robinson, James A., Economic Backwardness in Political Perspective (February 2002). Available at SSRN: https://ssrn.com/abstract=303188 or http://dx.doi.org/10.2139/ssrn.303188

Daron Acemoglu (Contact Author)

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James A. Robinson

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