The Iron Law of Oligarchy: A Tale of 14 Islands

The great puzzle of Caribbean history in the mid-19th century is that this was a time of radical institutional change – with all but one of the long-established Caribbean parliaments voting themselves out of existence inside a twenty-year window – despite very stable conditions in the (exogenous) terms-of-trade and in the (endogenous) local plantation economy. This paper argues that the post-slavery change of the planter elite into a more creole and colored composition did not change the incentives of the coercive Caribbean plantation economy, but that it did undermine the elite’s ability to dominate the political process within the given set of formal institutions, i.e. the locally elected parliaments. The new elite needed a new set of formal institutions to maintain the existing coercive institutional bundle. The first argument is a version of the ”iron law of oligarchy” (Michels (1911)), the second a version of the ”seesaw of de jure and de facto institutions” (Acemoglu and Robinson (2008)). Guided by a model of elite coherence and institutional choice, we explore our two arguments in a combination of very rich micro-data on islands’ parliamentary politics and sugar plantations, as well as colony-level regression analysis.