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

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