2004/05/01 by Daron Acemoğlu, Thierry Verdier, James A. Robinson · 5 citations
Social Sciences · Economics, Econometrics and Finance · #Culture, Economy, and Development Studies #Economic theories and models #Corruption and Economic Development
paper · doi:10.1162/154247604323067916
openalex publication_date 2004/05/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/23
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 the weakness of 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).