Towards an Elite Theory of Economic Development: A Conceptual Inquiry Into Value Creation and Its Measurement

This book constitutes an attempt to develop a new and novel approach to economics: an 'elite theory of economic development.' Elites are interest groups that successfully leverage lower transaction costs and higher levels of trust to assume effective coordination capacity over society's key resources such as data or credit. The book reviews the literature on elites and builds on it by describing how 'elite agency' secures from institutions--through political economy processes in the narrative market and non-market arenas--sought-after rights that afford market advantages when operating 'elite business models'. It then proposes that these models exist on a continuum that range from value creation to value extraction. 'Elite quality' refers to the degree of value creation in these models and has already been operationalized at the aggregate level of nations through the 'elite quality index'. The release of this country ranking--for which this book provides the extended theoretical foundation--has had a global impact consistent with its practical aims. 'Elite quality' is also designed to be testable as an independent variable for key macro variables such as growth, inequality or innovation. The emerging research stream associated with this work will allow the 'elite theory of economic development' to achieve its aims of relevance in policy-making and 'elite business model' transformation to enrich the public discourse towards developing value inclusive states of the world.