Competition and circulation of economic elites: Theory and application to the case of Peru

This study aims at understanding the behavior of economic elites. To do so, the paper presents a theoretical model of economic elites, which assumes a different behavior of elites for the First World and the First World economies. The paper then examines the empirical data of Peru to see whether they are consistent with the predictions of the theory and, indeed, finds consistency. At this stage of research, the theory of economic elites seems promising for explaining certain facts of the Third World: economic elites do not circulate endogenously; in addition, reforms in the market/state mix of the economy do not induce this circulation. If economic growth depends on the competitiveness of the economy, which in turn depends on more entrepreneurial capitalists, the latter depends, as suggested by the findings of this paper, on the circulation of elites (on the competition in this sphere, a kind of meta-competition). © 2007 Board of Trustees of the University of Illinois.