The Dictator's Inner Circle

From the National Bureau of Economic Research:

We posit the problem of an autocrat who has to allocate access to the executive positions in his inner circle and define the career profile of his own insiders. Statically, granting access to an executive post to a more experienced subordinate increases political returns to the post, but is more threatening to the leader in case of a coup. Dynamically, the leader monitors the capacity of staging a coup by his subordinates, which grows over time, and the incentives of trading a subordinate’s own position for a potential shot at the leadership, which defines the incentives of staging a palace coup for each member of the inner circle. We map these theoretical elements into structurally estimable hazard functions of terminations of cabinet ministers for a panel of postcolonial Sub-Saharan African countries. The hazard functions initially increase over time, indicating that most government insiders quickly wear out their welcome, and then drop once the minister is fully entrenched in the current regime. We argue that the survival concerns of the leader in granting access to his inner circle can cover much ground in explaining the widespread lack of competence of African governments and the vast heterogeneity of political performance between and within these regimes.

Authors: Patrick Francois, Ilia Rainer, Francesco Trebbi

NBER Working Paper No. 20216
June 2014

Hat-tip: The Interpreter