Towards an Elite Theory of Economic Development

Institutions are outcomes of elite agency. Leveraging ideas from economics, sociology, politics, and management, this book proposes an ‘elite theory of economic development’. The overarching goal is to foster sustainable value creation at the elite business model level. This work also aims to contribute to transformational leadership, and links are made to the annual Elite Quality Index (EQx), a measure of the value creation of national elites.

Tomas Casas-Klett is a permanent faculty member at the University of St.Gallen’s School of Management (SoM), Research Institute for International Management (FIM-HSG), the Director of its China Competence Center, and serves as a visiting Professor at leading universities in Asia, including the School of Economics and Management at Tsinghua University and the Hong Kong University of Science and Technology. His research interests include economic development, geopolitics and the global political economy, elites and leadership in top teams, entrepreneurship, international business, and the financial aspects of sustainable value creation. He is also the co-founder and co-editor of the Elite Quality Index (EQx) and the Value Creation Rating (VCr) reports which respectively measure the sustainable value creation of nations and firms.

Tomas holds a BSc in finance from the Wharton School at the University of Pennsylvania, an MSc from Fudan University in Shanghai, and a PhD in economics from the University of St.Gallen, Switzerland.

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.

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