Dictatorship Democracy and Dev

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Dictatorship, Democracy, and Development
Mancur Olson

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The American Political Science Review, Vol. 87, No.3 (Sep., 1993),567-576. Stable URL: http://links.jstor.org/sici?sici=0003-0554%28199309%2987%3A3%3C567%3ADDAD%3E2.0.CO%3B2-H The American Political Science Review is currently published by American Political Science Association.

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American Political Science Review

Vol. 87, No.3 September 1993

DICTATORSHIP, DEMOCRACY, AND DEVELOPMENT
MANCUR OLSON University of Maryland
nder anarchy, uncoordinated competitive theft by "roving bandits" destroys the incentive to invest and produce, leaving little for either the population or the bandits. Both can be better off if a bandit sets himself up as a dictator--{l "stationary bandit" who monopolizes and rationalizes theft in the form of taxes. A secure autocrat has an encompassing interest in his domain that leads him to provide a peaceful order and other public goods that increase productivity. Whenever an autocrat expects a brief tenure, it pays him to confiscate those assets whose tax yield over his tenure is less than their total value. This incentive plus the inherent uncertainty of succession in dictatorships imply that autocracies will rarely have good economic performance for more than a generation. The conditions necessary for a lasting democracy are the same necessary for the security of property and contract rights that generates economic growth. n my student days, in reading Edward Banfield's (1958) account of the beliefs of the people in a . poor village in Southern Italy, I came upon a remarkable statement by a village monarchist. He said, "Monarchy is the best kind of government because the King is then owner of the country. Like the owner of a house, when the wiring is wrong, he fixes it" (p. 26). The villager's argument jarred against my democratic convictions. I could not deny that the owner of a country would have an incentive to make his property productive. Could the germ of truth in the monarchist's argument be reconciled with the case for democracy? It is only in recent years that I have arrived at an answer to this question. It turns out that for a satisfactory answer one needs a new theory of dictatorship and democracy and of how each of these types of government affects economic development. Once this new theory is understood, one can begin to see how autocracies and democracies first emerge. I shall set out this conception in a brief and informal way and use it to explain some of the most conspicuous features of historical experience. The starting point for the theory is that no society can work satisfactorily if it does not have a peaceful order and usually other public goods as well. Obviously, anarchic violence cannot be rational for a society: the victims of violence and theft lose not only what is taken from them but also the incentive to produce any goods that would be taken by others. There is accordingly little or no production in the absence of a peaceful order. Thus there are colossal gains from prOviding domestic tranquility and other basic public goods. These gains can be...
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