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The Dictator’s Dilemma: to Punish or to Assist? Plan Failures and Interventions under Stalin

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Author Info
Andrei Markevich () (Department of Economics, University of Warwick (Coventry, UK), New Economic School and CEFIR, Interdisciplinary Centre for Studies in History, Economy and Society (Moscow, Russia))

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Abstract

A dictator issues an order, but the order is not carried out. The dictator does not know whether the order failed because the agent behaved opportunistically, or because his order contained some mistake. Imperfect information creates his dilemma: whether to punish the agent, or assist her or both. This paper models the dictator’s intervention when an order fails. The analysis links the dictator’s coercive policy with the softness of budget constraints. The model is verified against the history of Stalin’s dictatorship, using statistical evidence extracted from the formerly secret records of the Communist Party's "control commission".

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Publisher Info
Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0107.

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Length: 44 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:cfr:cefirw:w0107

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Related research
Keywords: dictatorship; principal-agent problem; soft budget constraints; USSR;

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Find related papers by JEL classification:
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
N44 - Economic History - - Government, War, Law, and Regulation - - - Europe: 1913-

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Janos Kornai & Eric Maskin & Gerard Roland, 2003. "Understanding the Soft Budget Constraint," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1095-1136, December.
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  2. Paul Gregory & Mark Harrison, 2005. "Allocation under Dictatorship: Research in Stalin's Archives," Journal of Economic Literature, American Economic Association, vol. 43(3), pages 721-761, September. [Downloadable!] (restricted)
  3. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Blackwell Publishing, vol. 38(113), pages 1-12, January. [Downloadable!] (restricted)
  4. Mark Harrison, 2005. "The Fundamental Problem of Command: Plan and Compliance in a Partially Centralised Economy," Comparative Economic Studies, Palgrave Macmillan Journals, vol. 47(2), pages 296-314, June. [Downloadable!] (restricted)
  5. Lazarev, Valery & Gregory, Paul, 2003. "Commissars and cars: A case study in the political economy of dictatorship," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 1-19, March. [Downloadable!] (restricted)
  6. Gregory, Paul & Schrôder, Philipp & Sonin, Konstantin, 2006. "Dictators, Repression and the Median Citizen: An “Eliminations Model” of Stalin’s Terror (Data from the NKVD Archives)," CEPR Discussion Papers 6014, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Ronald Wintrobe, 2001. "How to understand, and deal with dictatorship: an economist's view," Economics of Governance, Springer, vol. 3(1), pages 35-58, 03.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Harrison, Mark & Markevich, Andrei, 2007. "Quantity Versus Quality in the Soviet Market for Weapons," The Warwick Economics Research Paper Series (TWERPS) 822, University of Warwick, Department of Economics. [Downloadable!]
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