How Budgets Shape Autocrats' Survival Strategies

Abstract

How do budgets affect autocrats’ incentives to include rivals in their ruling coalitions? We construct and estimate a dynamic model of autocrats who adjust the composition of their coalitions to maintain power and maximize rents given changing budgets. The model’s key feature is that including rivals or purging them from government affect not only the leader’s office benefits but also his future survival and fiscal resources. Estimation reveals that even the most unconstrained dictators face large upfront costs from purging their rivals — it reduces their office benefits and, when budgets are tight, their survival chances. Yet purging has substantial dynamic benefits with tight budgets because it removes fiscally infeasible coalitions that also threaten survival. Furthermore, budget upswings comparable in magnitude to those generated by recent commodity booms have lasting effects on the likelihood that autocrats adopt inclusive governing coalitions increasing the probability by 10 percentage points after twenty or even forty years.

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