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A Rational Choice Explanation For Stalin'S "Great Terror"




There is no agreement about the reasons for Stalin's Great Terror of 1937-1939. This paper argues that the problem faced by Stalin was similar to the standard principal-agent problem: the country was run as one enormous firm with Stalin as the only residual claimant. The monetary incentive structure was inadequate and the threat of mass shirking by the agents was real. A simple model of a principal with two agents is developed to address the problem. Assuming that the agents can observe and can reveal each other's shirking, it is shown that, under some assumptions, an equilibrium exists with the following strategy profiles: unless someone's shirking is revealed, the principal is committed to randomly punishing one of the agents with positive probability; an individual agent never shirks and always reveals a co-worker's shirking. A case study of the period is used to check the plausibility of this hypothesis. Copyright 2007 Blackwell Publishing Ltd..

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  • Vahe Lskavyan, 2007. "A Rational Choice Explanation For Stalin'S "Great Terror"," Economics and Politics, Wiley Blackwell, vol. 19(2), pages 259-287, July.
  • Handle: RePEc:bla:ecopol:v:19:y:2007:i:2:p:259-287

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    References listed on IDEAS

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    6. Jagdish Bhagwati & Arvind Panagariya, 2004. "The Muddles over Outsourcing," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 93-114, Fall.
    7. Richard A. Brecher, 1974. "Minimum Wage Rates and the Pure Theory of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 88(1), pages 98-116.
    8. Brecher, Richard A., 1974. "Optimal commercial policy for a minimum-wage economy," Journal of International Economics, Elsevier, vol. 4(2), pages 139-149, May.
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    Cited by:

    1. Yuri M. Zhukov, 2014. "Theory of Indiscriminate Violence," Working Paper 365551, Harvard University OpenScholar.

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