Are stationary bandits better?

I once wrote:

Some time ago, [Mancur] Olson started work on the fruitful distinction between a stationary and a roving bandit. A stationary bandit has some incentive to invest in improvements, because he will reap some return from those improvements. A roving bandit will confiscate wealth with little regard for the future. Olson then used this distinction to help explain the evolution of dictatorship in the twentieth century, and going back some bit in time, the rise of Western capitalism.

I have never found this approach fully convincing. Is the stationary bandit really so much better than the roving bandit? Much of Olson’s argument assumes that the stationary bandit is akin to a profit-maximizer. In reality, stationary bandits, such as Stalin and Mao, may have been maximizing personal power or perhaps something even more idiosyncratic. Second, the stationary bandit might be keener to keep control over the population, given how much is at stake. He may oppose liberalization more vehemently, for fear that a wealthier and freer society will overthrow him.

Here is more.  I had forgotten I had written that review, so I must thank Arnold Kling for the pointer.


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