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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".

Suggested Citation

  • Andrei Markevich, 2007. "The Dictator’s Dilemma: to Punish or to Assist? Plan Failures and Interventions under Stalin," Working Papers w0107, Center for Economic and Financial Research (CEFIR).
  • Handle: RePEc:cfr:cefirw:w0107
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    References listed on IDEAS

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    1. Andrei Markevich, 2011. "How Much Control is Enough? Monitoring and Enforcement under Stalin," Europe-Asia Studies, Taylor & Francis Journals, vol. 63(8), pages 1449-1468.
    2. Ronald Wintrobe, 2001. "How to understand, and deal with dictatorship: an economist's view," Economics of Governance, Springer, vol. 3(1), pages 35-58, March.
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    6. Gregory,Paul R., 1990. "Restructuring the Soviet Economic Bureaucracy," Cambridge Books, Cambridge University Press, number 9780521363860, October.
    7. 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.
    8. 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.
    9. Howitt, Peter & Wintrobe, Ronald, 1995. "The political economy of inaction," Journal of Public Economics, Elsevier, vol. 56(3), pages 329-353, March.
    10. Valery Lazarev & Paul R. Gregory, 2002. "The wheels of a command economy: allocating Soviet vehicles[Research f]," Economic History Review, Economic History Society, vol. 55(2), pages 324-348, May.
    11. Mark Harrison, 2014. "The Fundamental Problem of Command: Plan and Compliance in a Partially Centralized Economy," World Scientific Book Chapters, in: THE ECONOMICS OF COERCION AND CONFLICT, chapter 10, pages 305-323, World Scientific Publishing Co. Pte. Ltd..
    12. Yoram Gorlizki, 1999. "Rules, Incentives and Soviet Campaign Justice After World War II," Europe-Asia Studies, Taylor & Francis Journals, vol. 51(7), pages 1245-1265.
    13. 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 265-286, December.
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    Cited by:

    1. Harrison, Mark & Markevich, Andrei, 2007. "Quantity Versus Quality in the Soviet Market for Weapons," Economic Research Papers 269771, University of Warwick - Department of Economics.
    2. Andrei Markevich, 2011. "How Much Control is Enough? Monitoring and Enforcement under Stalin," Europe-Asia Studies, Taylor & Francis Journals, vol. 63(8), pages 1449-1468.

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    More about this item

    Keywords

    dictatorship; principal-agent problem; soft budget constraints; USSR;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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