Structural Factors Case Study

structural factor may vary at the presence of other structural factors. This section explores the interplay between several pairs of socioeconomic factors. Essentially, the study divides interactive relations into three different types according to their substantive meanings. Each type includes two different interactions between two structural factors. The first type can be called mitigation effects. It basically involves the interactions of external threats with natural resources and with ethno linguistic divisions respectively. The idea is that the detrimental impacts of one structural factor on rulers’ incentives might decrease at the presence of another structural factor that induces rulers to pursue growth-enhancing policies. The second

The idea is that the effects of longer political tenure or lower hazard rates on rulers’ incentives depend on the presence of other structural factors.
Mitigation Effects of External Threats
The first type concerns the interaction of external threats with natural-resource intensity and with ethno linguistic heterogeneity respectively. For reason already discussed, high levels of natural-resource intensity and ethno linguistic heterogeneity affect rulers’ incentive in a negative way and induce them to adopt growth-retarding policies. On the other hand, when the levels of external threats increase, they induce rulers to expand national wealth to meet external challenges. For rulers, the opportunity costs of maintaining growth-retarding polices increase to the extent that they face competition from abroad. Now the question become what will rulers do if one structural factor induce rulers positively whereas the other factor induce them in a negative direction, e.g., rulers face high levels of natural-resource intensity and severe external threats at the same time. Thus, autocrats will not implement the strategies to enhance personal wealth if those strategies damage their chances of survivability, even though they are the efficient means to accumulate

These interactions exist when rulers are induced to develop by either international (external threats) or domestic factors (low natural-resource intensity) but at the same time they are facing privileged interests with strong bargaining power, i.e., when social wealth is highly concentrated. In such cases autocrats have the incentives to follow growth-enhancing policies but are not capable of enacting and implementing the most efficient strategy because rulers and technocrats are relatively weak relative to the dominant socioeconomic forces. In such a situation, rulers are not able to enforce contracts and establish impartial judicial systems, provide public goods for the poor, and remove existing price distortions. Moreover, it seems less likely that the dominant socioeconomic actors are internationally competitive at a country’s earlier stages of development. Dominant socioeconomic actors in such situations tend to be the highly asset-specificity sectors such as landlords or the highly protected import-substitution sectors. Implementing development-oriented policies typically requires another powerful actor to be able to break the existing equilibrium. For instance, initiating land reforms, shifting industrial policies from import substitution policy to export-oriented policy, eliminating non-performing loans, or removing