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

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  • Markevich, Andrei

    (Department of Economics, University of Warwick and Centre for Economical and Financial Research, New Economic School (Moscow, Russia) and 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

  • Markevich, Andrei, 2007. "The Dictator’s Dilemma : to Punish or to Assist? Plan Failures and Interventions under Stalin," The Warwick Economics Research Paper Series (TWERPS) 816, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:816
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    References listed on IDEAS

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    1. 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.
    2. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
    3. Andrei Markevich, 2007. "How Much Control is Enough? Monitoring and Enforcement under Stalin," Working Papers w0110, Center for Economic and Financial Research (CEFIR).
    4. J. Kornai & E. Maskin & G. Roland., 2004. "Understanding the Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
    5. Gregory,Paul R., 1990. "Restructuring the Soviet Economic Bureaucracy," Cambridge Books, Cambridge University Press, number 9780521363860, May.
    6. 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.
    7. 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.
    8. Howitt, Peter & Wintrobe, Ronald, 1995. "The political economy of inaction," Journal of Public Economics, Elsevier, vol. 56(3), pages 329-353, March.
    9. Mark Harrison, 2005. "The Fundamental Problem of Command: Plan and Compliance in a Partially Centralised Economy," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 47(2), pages 296-314, June.
    10. 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.
    11. Wintrobe,Ronald, 1998. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521583299, May.
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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).

    More about this item

    Keywords

    dictatorship ; principal-agent problem ; soft budget constraints ; USSR;

    JEL classification:

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

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