Agency Problems in Large Family Business Groups

Many writers—some of them reputable scholars, others important public officials—have implicitly assumed or explicitly argued that economic growth leads toward political stability and perhaps even to peaceful democracy. They have argued that “economic development is one of the keys to stability and peace in the world”; that it is “conditions of want and instability on which communism breeds”; and that economic progress “serves as a bulwark against international communism.” A recent and justly famous book on revolution by Hannah Arendt ascribes the most violent forms of revolutionary extremism mainly to poverty.