. Journal of Political Economy 122, no. 2: 319-368.Abstract
We use the colonial organization of chieftaincy in Sierra Leone to study the effect of constraints on chiefs' power on economic outcomes, citizens' attitudes and social capital. A chief must come from one of the ruling families originally recognized by British colonial authorities. Chiefs face fewer constraints and less political competition in chiefdoms with fewer ruling families. We show that places with fewer ruling families have significantly worse development outcomes today---in particular, lower rates of educational attainment, child health, non-agricultural employment and asset ownership. We present evidence that variation in the security of property rights in land is a significant mechanism. Paradoxically we also show that in chieftaincies with fewer ruling families the institutions of chiefs' authority are more highly respected among villagers, and measured social capital is higher. We argue that these results reflect the capture of civil society organizations by chiefs.
In this note we show how a considerably simpler model than the one in our original JDE 2006 paper generates all the same results. We also acknowledge an error in the specification of a utility function in our previous paper.
The question of who guards the guards is intimately connected with broader questions of state capacity and the establishment of a monopoly of violence in society, something which is often viewed as the defining feature of the modern state. But to establish such a monopoly, civilian rulers need not only to build an effective military, but also to control it. In this paper we study how governments may solve this problem when they recognize that their decisions to build a strong army may have ramifications for subsequent coups.
Acemoglu, Daron, and James A Robinson. 2010. Why is Africa Poor?. Economic History of Developing Regions 25, no. 1 June 2010: 21-50 .Abstract
In this paper we take for granted that the poverty of Sub-Saharan Africa is to a large part explained by its political and economic institutions. As citizens Africans do not have the incentives to save and invest, as politicians they do not have the incentive to provide public goods. We focus on the issue of how Africa developed such institutions. Historically, no society had the types of institutions required for modern economic growth, though a few had elements of them for quite long periods. Growth arose when institutional transitions took place. We argue that the historical dynamics of institutions in Africa have been different. Processes of state formation seem to have been delayed relative to Eurasia, and state institutions appear to have been intensely absolutist and patrimonial. These initial institutions interacted in a perverse way with a series of shocks that hit Africa, in particular the slave trade in the early modern period, and colonialism in the 19th and 20th centuries. Africa countries emerged at independence with a complex path dependent set of institutions that were probably even worse than those which they had at the time of colonization. It was these that precipitated authoritarianism, sustained economic decline and reinforced the poverty we see in Africa today.
In this paper, we suggest a new rationale for the existence of interlinked contracts in the agrarian economies of developing countries. Using the framework of an infinitely repeated game with discounting, we show that interlinked contracts can help the dominant parties to collude, in cases where collusion is not possible with noninterlinked contracts. This occurs because either interlinkage pools incentive constraints across markets, or it affects the incentives of agents to accept deviating contracts. We illustrate these mechanisms by considering the case of interlinkage between markets for credit and share tenancy. The model that is used to formalize the second mechanism is characterized by frictions in the tenancy market, which we model using the standard framework of search and matching.