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

  • 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))

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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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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  1. Gregory, Paul R. & Schröder, Philipp J.H. & Sonin, Konstantin, 2011. "Rational dictators and the killing of innocents: Data from Stalin's archives," Journal of Comparative Economics, Elsevier, vol. 39(1), pages 34-42, March.
  2. Ronald Wintrobe, 2001. "How to understand, and deal with dictatorship: an economist's view," Economics of Governance, Springer, vol. 2(1), pages 35-58, 03.
  3. 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.
  4. J�nos Kornai & Eric Maskin & G�rard Roland, 2003. "Understanding the Soft Budget Constraint," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1095-1136, December.
  5. Gregory,Paul R., 1990. "Restructuring the Soviet Economic Bureaucracy," Cambridge Books, Cambridge University Press, number 9780521363860.
  6. Howitt, Peter & Wintrobe, Ronald, 1995. "The political economy of inaction," Journal of Public Economics, Elsevier, vol. 56(3), pages 329-353, March.
  7. 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.
  8. Wintrobe,Ronald, 1998. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521583299.
  9. 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.
  10. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
  11. Andrei Markevich, 2007. "How Much Control is Enough? Monitoring and Enforcement under Stalin," Working Papers w0110, Center for Economic and Financial Research (CEFIR).
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