TY - JOUR AU - Acemoglu,Daron AU - Robinson,James A. AU - Verdier,Thierry TI - Kleptocracy and Divide-and-Rule: A Model of Personal Rule JF - National Bureau of Economic Research Working Paper Series VL - No. 10136 PY - 2003 Y2 - December 2003 UR - http://www.nber.org/papers/w10136 L1 - http://www.nber.org/papers/w10136.pdf N1 - Author contact info: Daron Acemoglu Department of Economics MIT, E52-380B 50 Memorial Drive Cambridge, MA 02142-1347 Tel: 617/253-1927 Fax: 617/253-1330 E-Mail: daron@mit.edu James A. Robinson Harvard University Department of Government N309, 1737 Cambridge Street Cambridge, MA 02138 Tel: 617/496-2839 Fax: 617/495-0438 E-Mail: jrobinson@gov.harvard.edu Thierry Verdier Paris-Jourdan Sciences Economiques 48 Boulevard Jourdan 75014 Paris FRANCE Tel: 33-1-4313-6308 Fax: 33-1-4313-6310 E-Mail: verdier@pse.ens.fr AB - 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 weaknesses in the 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). ER -