14th journées Louis-André Gérard-Varet

Font Size: 
Rent seeking, revolutionary threat and coups in non-democracies
Paul Maarek, Michael Dorsch

Last modified: 2015-03-13

Abstract


In this paper, we study both theoretically and empirically the political turnover process in autocracies due to coups. We argue that the likelihood of a coup is related to the threat of revolution. In our model, a ruler extracts rent for the elite in order to prevent coups. Moreover, rulers dier in the effciency with which rents are extracted and the impact of rent extraction on economic outcomes depends on the ruler's type. Economic outcomes are also subject to economic shocks and workers make inference on the elite type. They may choose to revolt in order to democratize. We characterize equilibrium of the game such that equilibrium rent of both ruler type induce workers to revolt when they believe with sufficiently high probability that the ruler is a bad type. In such a case, the elite
have an incentive to mount a coup in order to replace the ruler which lowers the threat of a costly revolution by the workers. We then test the theory using panel data on economic shocks, coups and popular unrest using probit fixed eects regressions.

Keywords


Political Turnover; Rent Seeking; Coups; Popular Unrest