Question

As discussed in the chapter​ "Why Poor Countries are​ Poor" from​ Harford's book, The Undercover Economist​, which of the following is a good summary of Mancur​ Olson's theory of dictatorships in poor​ countries?

Answer 1

Answer:

Mancur Olson states in his collective action theory that any public institution or group of people will have trouble in administering the public goods and its effectiveness.

Explanation:

Mancur Olson states in his collective action theory that any public institution or group of people will have trouble in administering the public goods and its effectiveness. Regarding the economy in poor countries, Olson explains that it is much better to have stable dictatorships that unstable dictatorships due to the fact that this will affect less in economic terms. Olson also explain how in the world of decreasing economies the poor countries are the ones who decrease the most and finally he proposes changes and reforms for the poor countries as the solution for a growing economy in order to expand and be able to be successful.

Answer 2

Answer:

The options are missing but in answering the question Olson's is of the opinion that a stationary bandit (dictator) is better than a roving bandit. The roving bandit plunders all that is available living little or nothing  thus eliminating the incentive to invest and produce, while if the bandit were to entrench himself offering protection and rationalize is theft in the form of taxes there is much to gain for him and the people in that community. This encourages investement and porduction.