Economic Backwardness in Political Perspective
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 the relationship between blocking and political competition is nonmonotonic: 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 when their power is threatened that elites will block development. Blocking is also more likely when political stakes are higher, for example, because of land rents enjoyed by the elites. External threats, on the other hand, may reduce the incentives to block.
c1 Daron Acemoglu is Professor, Department of Economics, Massachusetts Institute of Technology, 50 Memorial Drive, Cambridge MA 02142 (email@example.com).
c2 James A. Robinson is Professor, Department of Government, Harvard University, 1737 Cambridge Street, Cambridge MA 02138 (firstname.lastname@example.org).