Citizens, Autocrats, and Plotters: An Agency Theory of Coups D'Etat

WP CEA #11

32 Pages Posted: 19 Feb 1998

See all articles by Ricardo Sanhueza

Ricardo Sanhueza

Universidad de los Andes, Chile - School of Economics and Managerial Sciences

Alexander Galetovic

Universidad Adolfo Ibáñez; Stanford University - The Hoover Institution on War, Revolution and Peace; University of Padua - CRIEP

Date Written: July 1997

Abstract

We present an agency model of coup attempts in autocracies. The autocrat's objectives conflict with those of the citizenry. Under the assumption that the autocrat's policy choices cannot be observed by the citizenry, but are correlated with the short-run performance of the economy we find that: (a) the threat of a coup disciplines the autocrat; to some extent it aligns his objectives with those of the citizenry; (b) coups are more likely when there is a recession; (c) increasing the average level of per-capita income has an ambiguous effect on the probability of a coup attempt. We find that the implications of the model are consistent with empirical evidence. In a panel of 89 non-communist LDCs one recession increases the probability of a coup attempt by 47% on average.

JEL Classification: D72

Suggested Citation

Sanhueza P., Ricardo and Galetovic, Alexander, Citizens, Autocrats, and Plotters: An Agency Theory of Coups D'Etat (July 1997). WP CEA #11. Available at SSRN: https://ssrn.com/abstract=60831 or http://dx.doi.org/10.2139/ssrn.60831

Ricardo Sanhueza P.

Universidad de los Andes, Chile - School of Economics and Managerial Sciences ( email )

Chile

Alexander Galetovic (Contact Author)

Universidad Adolfo Ibáñez ( email )

Peñalolén
Santiago
Chile

Stanford University - The Hoover Institution on War, Revolution and Peace ( email )

Stanford, CA 94305-6010
United States

University of Padua - CRIEP ( email )

Padua
Italy

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