An amazing paper by the foursome Alberto Chong, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer. They say it is incredibly preliminary but the broad idea is pretty much there.

They look at this issue of governance in a country. There are two reasons why we  have bad govts:

At the broadest level, there are two reasons for bad government in developing countries: political economy and productivity. The political economy arguments hold that governments in poor countries are less accountable because citizens have few opportunities to exercise their voice (Hirschman 1970). As countries become richer and more educated, government responsiveness to citizen needs and hence its quality improves, in part because politics become more democratic and transparent

An alternative view of bad government in developing countries is low productivity of government services, similar to low productivity in the private sector. Part of the problem might be inferior inputs, including human and physical capital as well as technology. Part of the problem might also be poor management, including the lack of supervision and monitoring (Bloom et al. 2007, 2010a,b, 2012a,b; Lewis 2004).

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