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WHY NATIONS FAILED Another related idea that greater political stakes will not only make the

elites more likely to pursue inefficient policies or repression to cling to power, but also encourage would-be elites to contest power in order to take control of natural resources rents a possibility only made more plausible by the all too frequent civil wars in resource-rich countries. (Theoretically, this result follows from standard contest models applied to politics. In this model an incumbent politician is trying to stay in power when faced with an election or more generally a contest, by engaging in patronage. In the model patronage takes the form of granting employment in the public sector to some selected groups. This is socially inefficient because people are more productive in the private sector but the role of public sector employment is to tie peoples future incomes to the incumbent staying in power, thus giving them an incentive to support him in the election/contest.