------------ EH.NET BOOK REVIEW --------------  
Published by EH.NET (October 2006)  
  
Daron Acemoglu and James A. Robinson, _Economic Origins of   
Dictatorship and Democracy_. New York: Cambridge University Press,   
2005. xv + 416 pp. $35 (cloth), ISBN: 0-521-85526-6.  
  
Reviewed for EH.NET by Michael Munger, Department of Political   
Science, Duke University.  
  
  
The key questions posed in this book have to do with the origins and   
stability of institutions. Specifically, why do some nations   
introduce democratic institutions and others fail to do so? And,   
among nations that have become democratic at least once in their   
histories, why is it that some become stable democracies and others   
revert to authoritarian regimes, and in some cases careen wildly back   
and forth between regime types?  
  
The book rests on a seeming paradox: politically powerful groups need   
some device that will allow them credibly to commit to reducing their   
own power. The threat of mass revolution cannot be forestalled by the   
promise of side payments, unless the means by which those side   
payments are decided and awarded is literally within the power of the   
masses.  
  
The authors (Acemoglu is Kindleberger Professor of Applied Economics   
at MIT, and Robinson is Professor of Government at Harvard) note that   
democracies face this problem just as much as autocracies. That is,   
coups against democracies that impose an oligarchy have much the same   
logic as coups against oligarchies that seek to impose democracy. In   
both cases, at least with full information, the current regime will   
nearly always be better off offering concessions and side payments.   
But the coup may occur anyway, if the existing regime, regardless of   
its type, fails to devise a credible means of guaranteeing the   
compensation once the coup threat dissipates. This is a particular   
problem when the leaders of a potential coup recognize that their   
ability to make threats is transitory.  
  
Their methodological approach rests on an extremely innovative suite   
of formal models. There is more than enough use of historical   
examples and applications to give flesh to the mathematical skeleton,   
however, and the book can be profitably read even by those for whom   
advanced modeling is difficult.  
  
Ultimately, the testable predictions of the models can be summarized,   
with only minor damage to nuance, fairly briefly. First, democracies   
have historically been created by elites when the threat of social   
unrest and violence cannot be defused in any other way. This   
condition will only be met when the conditions in which citizens live   
are so bad, but the set of civic connections and infrastructure for   
overcoming the collective action problems inherent in organizing   
revolution are so good, that revolution is imminent. Second,   
democracies will not be an answer to the threat of revolution, even   
credibly imminent revolution, when inequality is so high, and/or when   
the assets of elites are easily nationalized or taxed away, or when   
elites expect to lose control of the ability to write down basic   
constitutional rules that constrain the scope of democratic   
government action.  
  
More simply, then, we expect elites to support democratic transitions   
when the threat of failing to do so is nearly certain revolution, and   
when the expected political and economic costs of democracy can be   
kept within certain bounds.  
  
The set-up for the analysis is a very brief, "history seen from a   
hang-glider," overview of four regime transition histories: England   
(from oligarchy to stable democracy); Argentina (veering wildly   
between numerous unstable equilibria); Singapore (from oligarchy to   
stable oligarchy, but with significant economic growth); and South   
Africa (from colonial kleptocracy to apartheid to possibly stable   
democracy).  
  
I expect that the book will be one of the influential pieces of   
scholarship of the past decade. Its virtue is its flaw: it develops a   
coherent framework that takes a particular perspective (instantiating   
the claims of threat and cost outlined above in a model), and derives   
propositions from those models. Some might interpret coherence as   
narrowness, even over-simplification, but those of us committed to   
the enterprise of modeling are persuaded that parsimony is a virtue.   
The perspective taken here may be wrong, of course. But it is clear   
just what theoretical assumptions and premises for argument underlie   
the claims, and it is equally clear how the conclusions are reached.   
The models, and their implications, are dramatic steps forward,   
precisely because some of them are likely to be extended or corrected   
in work that is provoked by Acemoglu and Robinson.  
  
There is one kind of problem the book does not handle very well, and   
I would like to discuss this briefly. The authors clearly recognize   
that making promises about a fundamental change in the way that   
political and economic property rights are defined, and disputes   
adjudicated, is very difficult, no matter how good one's intentions.   
The problem is that no one can be sure that the initial assignment   
will be stable. The problem is more complex than the simple generic   
instability results, to which the authors here give cursory attention   
in Chapter 4. Their solution, a variant of the probabilistic voting   
model, goes some way toward ensuring an outcome, in the sense of the   
existence of equilibrium.  
  
But not far enough, in my opinion. William Riker's idea of   
heresthetics is something more than the passive acceptance of the   
dimensionality of the space of political conflict given by elite   
consensus. Heresthetics, or the strategic introduction of one or more   
new issues calculated to split the ruling coalition, either in an   
oligarchy or a democracy, is a dynamic force that is difficult or   
impossible to control. Acemoglu and Robinson are entirely too   
confident of the ability of political institutions to control the   
specter of political, and ultimately revolutionary, chaos. Their   
invocation of probabilistic voting, with its implicit convexification   
of the nonconvexities in aggregate preference orders, is a band-aid   
that will not hold things together.  
  
That said, I have no alternative solution to offer, and the   
forecasting of the outcome of chaotic voting trajectories is by   
definition rather dicey. The threat of the heresthetician is   
something close to, "Give me what I want, or I'll blow up the   
building we all live in!" This threat may not be strictly rational,   
since one is trading away risk and embracing true uncertainty. But it   
is plausible that some groups excluded from power, in either   
oligarchic or democratic regimes, might be willing to threaten, and   
perhaps even to carry out, revolutionary actions that seem suicidal.  
  
My quibble about social choice stability aside, I would recommend   
this book to anyone with a serious interest in democratic transitions   
and economic development. Its historical scope, and the power of the   
models it develops, set a new standard in political economy.  
  
  
Michael Munger is chair of the Political Science Department at Duke   
University, and writes on political economy and public choice.  
  
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