When citizens in a poor constrained society are unequally endowed,
they are likely to find it hard to agree on reforms, even though the
status quo hurts them collectively. Each citizen group or constituency
prefers reforms that expand its opportunities, but in an unequal society,
this will typically hurt another constituency's rents. Competitive
rent preservation ensures no comprehensive reform path may command
broad support. The roots of underdevelopment may therefore
lie in the natural tendency toward rent preservation in a divided
society. (JEL D72, O10, O17)
Rajan, Raghuram G.
"Rent Preservation and the Persistence of Underdevelopment."
American Economic Journal: Macroeconomics,
Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
Economic Development: General
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements