From Poverty to Prosperity: Understanding Economic Development part 2
- Nov 14, 2017
- 2 min read
Module 2
An inclusive state is one where ordinary people benefit. We introduced Acemoglu and Robinson's passage to democracy versus Besley and Persson’s passage from a redistributive state to a common-interest state, which could be a democracy, but does not have to be.
Firstly we examined the minor route, in which the elite are still in power, but the ruler makes a choice between economic growth and redistribution of wealth to the elite. We then looked at the major route, in which democratisation is the result of pressure from below through protest. Finally, we learnt that the reasons inclusive states do not emerge everywhere include repression being too successful and/or the benefits for redistribution being very large relative to the benefits of going for growth.
Secure elites that are large will choose economic growth, whereas insecure elites that are smaller choose redistribution.
In the minor route, factors such as the security and size of the elite, and the structure of that society’s identity (shared or fragmented) influence the elite’s choices.
Protests must 'roll up' at the individual level until there are too many people for the state to handle. If however, in the early stages of a protest, the rolling-up is blocked, the protest will fail.
At higher levels of per capita income, autocracies face a greater risk of protest, whereas in democracies, as the per capita income increases, the chances of protest decrease because there is less to protest about.
In order to avoid the destructive power of a protest, a dictator must offer the people elections - effectively stepping down from autocracy.
Elections are not enough to make a democracy function properly: checks and balances on the conduct of elections are necessary.
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