Why do Autocrats Disclose?
38 Pages Posted: 25 Aug 2014
Date Written: 2014
Autocratic governments are often thought to hold a strong preference for opacity. Autocracies are, on average, less transparent than democracies and a closed informational environment serves as a mechanism for preventing mass unrest and preserving the autocratic regime. Yet, autocracies vary widely in the extent to which they disclose economic information to their publics. In this paper, we offer an explanation for why some autocrats choose to disclose. The disclosure of information to the public benefits autocratic leaders in two ways: First, it encourages increased foreign investment, boosting the available resources for disbursing rents to the leader and to members of the regime. Second, precisely because a more transparent informational environment facilitates mass unrest, it renders elites more complacent. Members of the elite are less willing to take action to remove their leader as the regime becomes less stable. In essence, transparency enables the leader to use the risk of mass insurrection as a threat to better control members of her regime. We illustrate these arguments with a formal model, and we demonstrate that -- consistent with theoretical expectations -- leaders are more likely to disclose in institutionalized regimes and when leaders are newly appointed. We further demonstrate that transparency predicts FDI inflows.
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