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

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  • 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))

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

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References

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  1. Belova, Eugienia & Gregory, Paul, 2002. " Dictator, Loyal, and Opportunistic Agents: The Soviet Archives on Creating the Soviet Economic System," Public Choice, Springer, vol. 113(3-4), pages 265-86, December.
  2. Markevich, Andrei, 2007. "How Much Control is Enough? Monitoring and Enforcement under Stalin," The Warwick Economics Research Paper Series (TWERPS) 829, University of Warwick, Department of Economics.
  3. Gregory,Paul R., 1990. "Restructuring the Soviet Economic Bureaucracy," Cambridge Books, Cambridge University Press, number 9780521363860, April.
  4. J. Kornai & E. Maskin & G. Roland., 2004. "Understanding the Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
  5. Paul R. Gregory & Philipp J.H. Schr oder & Konstantin Sonin, 2006. "Dictators, Repression and the Median Citizen: An “Eliminations Model” of Stalin’s Terror (Data from the NKVD Archives)," Working Papers w0091, Center for Economic and Financial Research (CEFIR).
  6. Howitt, Peter & Wintrobe, Ronald, 1995. "The political economy of inaction," Journal of Public Economics, Elsevier, vol. 56(3), pages 329-353, March.
  7. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
  8. 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.
  9. 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.
  10. Mark Harrison, 2005. "The Fundamental Problem of Command: Plan and Compliance in a Partially Centralised Economy," Comparative Economic Studies, Palgrave Macmillan, vol. 47(2), pages 296-314, June.
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Cited by:
  1. Mark Harrison & Andrei Markevich, 2007. "Quantity Versus Quality in the Soviet Market for Weapons," Working Papers w0109, Center for Economic and Financial Research (CEFIR).

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