Working Paper

2017-06-06

University of Cape Town

History offers many examples of dictators who worsened their behaviour significantly over time (like Zimbabwe’s Robert Mugabe) as well as dictators who displayed remarkable improvements (like Jerry Rawlings of Ghana). We show that such mutations can result from rational behaviour when the dictator’s flow use of repression is complementary to his accumulated stock of wrongdoings. Interacting this complementarity with uncertainty over the dictator’s degree of impunity in relation to wrongdoing (such that the dictator becomes inclined to experiment along this dimension), produces an environment in which any individual rising to power can end up as either a moderate leader, or as a dreaded tyrant. Our model shows that dictators are more likely to derail with higher levels of divertible funds available, for example stemming from fungible aid inflows or from the exploitation of natural resources. It furthermore suggests that derailment is accidental and that such leaders suffer from ex-post regret. Consequently, increasing accountability can be in the interest of both the public and the dictator.

Shaun Larcom: Department of Land Economy, University of Cambridge, 6-21 Silver Street, Cambridge CB39EP, United Kingdom. Tel.: +44 20 3073 8320. E-mail: stl25@cam.ac.uk. Corresponding author. Mare Sarr: School of Economics, University of Cape Town, Private Bag X3, Rondebosch 7701, South Africa. Tel.: +27 21 650 2982. Email: mare.sarr@uct.ac.za. Tim Willems: Nuffi eld College, and Department of Economics, University of Oxford, Manor Road Building, Manor Road, Oxford OX1 3UQ, United Kingdom. Also a member of the Centre for Macroeconomics. Tel.: +44 75 076 729 84. E-mail: tim.willems@economics.ox.ac.uk.