Working Paper: CEPR ID: DP4777
Authors: George Egorov; Konstantin Sonin
Abstract: The possibility of treason by a close associate has been a nightmare of most dictators throughout history. Better informed viziers are also better able to discriminate among potential plotters, and this makes them more risky subordinates for the dictator. To avoid this, dictators – especially those which are weak and vulnerable – sacrifice the competence of their agents, hiring mediocre but loyal subordinates. One reason why democracies generally witness more talented people in the government is the dictator’s inability to commit to the optimal (less than the capital) punishment for those who unsuccessfully plotted to remove him from power. Furthermore, any use of incentive schemes by a dictator is limited by the fact that rewards are conditional on dictator’s own willingness to keep his promises, while punishments are conditional on dictator’s own survival. We model a principal-agent game between a dictator and his (probably, few) viziers both in static and dynamic perspectives. The dynamic model allows us to focus on the succession problem the insecure dictators face.
Keywords: dictatorship; formal political theory; principal-agent
JEL Codes: D72; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Advisor competence (D83) | Likelihood of betrayal (D80) |
| Advisor loyalty (L85) | Likelihood of betrayal (D80) |
| Choice of advisor (G11) | Stability of regime (C62) |
| Inability to commit to optimal punishment (D91) | Suboptimal selection of advisors (D82) |
| Suboptimal selection of advisors (D82) | Adverse effects on governance (H11) |
| Suboptimal selection of advisors (D82) | Adverse effects on economic performance (F69) |
| Dynamics of succession (C69) | Threat to dictator's power (D72) |
| Agency problems (G34) | Incompetence in dictatorial regimes (D73) |