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Autocracy and coups d'etat

Ronald Wintrobe
Public Choice
Vol. 152, No. 1/2, The intellectual legacy of Gordon Tullock (July 2012), pp. 115-130
Published by: Springer
Stable URL: http://www.jstor.org/stable/41483757
Page Count: 16
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Autocracy and coups d'etat
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Abstract

In this paper I first briefly survey Tullock's contributions to the study of autocracy and coups d'etat. Tullock's analysis of the coup d'etat is insightful. He suggested that those at the top could control those at the bottom with a proper system of incentive payments. Here I expand on that idea by asking the reverse question, not what keeps those at the bottom from rebelling, but what keeps those at the top from looting the regime? I begin by noting that shareholders of the modern widely held corporation face a similar problem: what keeps the CEO from looting the company when the market for corporate control is flawed, shareholders are too weak to exercise discipline, and the board is in the CEO's pocket? I suggest the answer is provided by "internal governance": the old need the young for good performance. I explain the financial crisis of 2008 as in part the result of the failure of this mechanism. I also explain the success of modern China this way: The Communist Party facilitates growth because its structure provides a way for superiors (the "old") to trade with subordinates (the "young"). I have also expanded on Tullock's analysis to ask what conditions might prevent the dictator from implementing his solution to the coup d'etat problem, thus explaining why coups d'etats actually occur. The basic reason is the weakness of the state. Japanese history provides two interesting illustrations of this: first the Tokugawa regime, where the people were over-controlled, and second, the Meiji constitution, implemented after the fall of the Tokugawa state. The Japanese problem after Meiji was that the military (the young) had no incentive to offer their loyalty to the old (the civilian regime), so the young acted on their own. The problem was the reverse of the Tokugawa regime's: the Meiji constitution left the bottom with too much control over the top. There was no formal coup d'etat but a number of coup attempts were made and defacto the military increasingly constituted a state within a state. This reversal of authority apparently continued down the chain of command, ultimately with tragic consequences, most notably the invasion of Pearl Harbor.

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