Faithin Omaha eBook Collection

Download or read book Elites, Institutional Change, Institutional Persistence and Economic Development written by Adewole Musiliu Adeolu and published by . This book was released on 2016 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the essay, we show how the preference of political elites for special status and power translates to an institutional structure that not only maximizes their relative share of social wealth through predation but ensure they keep as wide as possible the gap between actual development and potential development. In exchange for de facto power, their choice of institution is one which yields them less rather than more wealth. Though developmental institutions will yield them more wealth, political elites still avoid choosing the socially optimal institution because the resulting political configuration will turn them into elites with merely de jure political power. We draw on a number of historical and contemporary examples to which our model applies. Drawing on the experiences of nations which have successfully transited from growth-inhibiting to developmental institutions, we isolated factors critical to the attainment of this transition. Factors considered included revolution or the threat of revolution, religion through it impact on human capital, international trade and entrepreneurship, external wars and political competition between countries. In examining barriers in the way of countries yet to transit, we identified ethnic diversity and natural resource endowment. Both have prevented to a large extent the emergence of common constitutional pact across elites belonging to groups with different complexities. The challenge remains overcoming these barriers. New pro-development elites are required to make the initial investments in efforts and organization required to upset the status quo. Only when they start would the larger society follow in their steps to sustain and implement the desired institutional change.