Ronald Wintrobe

The Tinpot and the Totalitarian: An Economic Theory of Dictatorship

I use basic tools of economic theory to construct a simple model of the behavior of dictatorships. Two extreme cases are considered: a “tin-pot†dictatorship, in which the dictator wishes only to minimize the costs of remaining in power in order to collect the fruits of office (palaces, Mercedes-Benzes, Swiss bank accounts), and a “totalitarian†dictatorship, whose leader maximizes power over the population. I show that the two differ in their responses to economic change. For example, a decline in economic performance will lead a tin-pot regime to increase its repression of the population, whereas it will lead a totalitarian government to reduce repression. The model also shows why military dictatorships (a subspecies of tin-pots) tend to be short-lived and often voluntarily hand power over to a civilian regime; explains numerous features of totalitarian regimes; and suggests what policies will enable democratic regimes to deal with dictatorships effectively.

The Equilibrium Size of a Budget-maximizing Bureau: A Note on Niskanen's Theory of Bureaucracy

William Niskanen, elaborating on a hypothesis initially formulated by Parkinson (1962) and Tullock (1965), has recently developed a formal and elegant model of bureaucratic supply of public output (1967, 1971) which implies that a central and characteristic feature of the public sector is oversupply of output and not inefficiency in the narrow sense of output provided at more than minimum cost.2 Niskanens model rests on two central assumptions. One is that bureaucrats maximize the size of their budgets and the other that bureaucrats are in effect simple monopolists who are able to impose their own preferences on the governing political party. In this note we would like to raise questions about the two assumptions and suggest that neither of them is acceptable. For that purpose, in the next section, we first restate what we take to be the core of the model in order to bring out some implications which Niskanen overlooks. Then we abandon the assumption that bureaucrats are simple monopolists and replace it with one that allows a role to politicians, but we retain the hypothesis of budget maximization. We show that the model so modified can account for some features of the real world which the pure Niskanen model is unable to explain. In the third section, we go further and suggest that a number of other important facts appear to be inconsistent with the assumption of budget maximization itself. We conclude by arguing that an alternative hypothesis is needed which would be more general, in the sense that it would be capable of providing an explanation for the facts that appear consistent at least with the modified version of the Niskanen model adumbrated here, but which could also explain those facts which seem to be beyond the capacity of even the modified model.

The political economy of inaction

Abstract This paper develops a simple model of political inaction in a two-party democracy, i.e. it shows the conditions under which both parties will prefer to live with an unsatisfactory and inefficient status quo rather than to raise an issue. The risk of raising the issue to either party is the fear of ending up with the other partys policy (for example, by losing the electron), regarded as even worse than the status quo. The model shows that the problem is likely to be particularly serious, the more evenly matched is political competition, the more risk-averse the parties, the less voters trust the parties, the more divided is public opinion and the more important the issue. The model is illustrated with a number of examples of real-world inaction, e.g. on fiscal deficits, abortion, the transition to socialism and the fall of the Weimar Republic. In general, the analysis also suggests that, over a range, more representation of political viewpoints implies a smaller likelihood of political action, so that democracy implies a tradeoff between representation and the capacity for political action.

How to understand, and deal with dictatorship: an economist's view

Abstract. This paper explains in simple English some of the main ideas about autocracy first developed elsewhere (e.g., in my book, The Political Economy of Dictatorship (Cambridge University Press, 1998). I use rational choice theory to explain the behavior of dictatorships and develop policy toward them. Issues discussed in this paper include: How do successful regimes stay in power? What determines the repressiveness of a regime? Which type of regime redistributes more, dictatorship or democracy? Can dictatorships be good for economic growth and efficiency? The starting point of my analysis is The Dictators Dilemma-the insecurity every dictator necessarily experiences about how much support he really has. Because of this, the dictator finds that the tool of repression is not enough to maintain his regime, and successful dictators typically rule with the loyal support of at least some groups of subjects (while repressing others). The levels of repression and support and the nature of the groups that give their support (labor, business, ethnic group, etc.) determine the character of the dictatorship. Among other results discussed, I show that some types of dictators – tinpots and timocrats – respond to an improvement in economic performance by lowering repression, while others – totalitarians and tyrants – respond by raising it. Finally I discuss optimal policy by the democracies toward dictatorships and I show that a single standard-aid or trade with a progressively tightening human rights constraint- is desirable if aid or trade with dictatorships of any type is to lower, not raise, repression.

Political Extremism and Rationality

Political extremism is widely considered to be the product of irrational behavior. The distinguishing feature of this collection by well-known economists and political scientists from North America, Europe and Australia is to propose a variety of explanations which all insist on the rationality of extremism. Contributors use variants of this approach to shed light on subjects such as the conditions under which democratic parties take extremist positions, the relationship between extremism and conformism, the strategies adopted by revolutionary movements, and the reasons why extremism often leads to violence. The authors identify four core issues in the study of the phenomenon: the nature (definition) of extremism and its origins in both democratic and authoritarian settings, the capacity of democratic political systems to accommodate extremist positions, the strategies (civil disobedience, assassination, lynching) chosen by extremist groups, and the circumstances under which extremism becomes a threat to democracy.

Rational Extremism: Can Suicide Bombers Be Rational?

*Earlier versions of this or a related paper have been presented at the 2002 meeting of the McArthur Preferences Network at the University of Pennsylvania, as a plenary lecture on the panel “Religion and Politics” at the 2002 meetings of the European Public Choice Society in Belgirate, Italy, at the Universities of Buffalo and Western Ontario, and at the German Institute for Economic Research (DIW) conference on “The Economic Consequences of Terrorism.” I am indebted to participants in those seminars for comments, especially Isaac Ehrlich, Mario Ferrero, Arye Hillman, Jean-Dominique Lafay, David Laibson, Clark McCauley, Juan Mendoza, Fabio Padavano and Pierre Salmon, and to Silvia Fedeli, Gianluigi Galeotti, Sid Noel and Peter Rosenthal for helpful discussions and comments. I wish to thank Miana Plesca for able research assistance. The usual disclaimer applies.

It pays to do good, but not to do more good than it pays: A note on the survival of altruism

Abstract Recently Becker and Hirshleifer have attempted to explain the survival of altruism. Altruism ‘pays’ in their framework because it permits mutual cooperation or exchange to take place. This paper shows that these arguments are invalid. This case is that in any environment where altruism pays there is always an egoistic strategy called cooperation egoism — which yields an even higher return. In equilibrium, this will be anticipated so that, while altruism may pay off in a disequilibrium situation, in equilibrium egoism and not altruism has survival value.

Privatisation, the Market for Corporate Control, and Capital Flight from Russia

The estimates of the amount of capital flight vary widely, ranging from a low of

The political economy of theocracy

30 billion toa high of

Freedom of speech vs. efficient regulation in markets for ideas

300 billion.1PRIVATIZATION, THE MARKET FOR CORPORATE CONTROL, AND CAPITAL FLIGHT FROM RUSSIARonald W introbeDepartment of Economics University of W estern Ontario1. IntroductionWhile the data are ambiguous and estimates vary considerably, there seems to be a generalconsensus that some, perhaps a substantial amount