Coups, Elections and the Predatory State

Even in the absence of elections, incumbents face threats to their survival which could induce them to reduce self-interested rent-seeking behavior. I compare the differences in incentives for incumbents to reduce rent extraction when they face a threat of being overthrown as opposed to when they face competitive elections. The key difference between the situations is that while voters do not gain office as a result of removing the incumbent, groups which overthrow the government assume power as a result of their actions. The results show that the threat of a coup sometimes leads incumbents to extract less than they do under elections. When the value of holding office in the future is sufficiently high, however, the threat of a coup cannot discipline the incumbent at all. I also find that incumbents facing both electoral and coup threats are either as likely, or under certain conditions, less likely to be overthrown than incumbents facing just a coup threat. The results are consistent with existing empirical evidence on the influence of regimes on economic performance and on the occurrence of coups.