Autocrats in many developing countries have extracted enormous personal rents from power. In addition, they have imposed inefficient policies including pervasive patronage spending. I present a model in which the presence of ethnic identities and the absence of institutionalized succession processes allow the ruler to elicit support from a sizeable share of the population despite large reductions in welfare. The fear of falling under an equally inefficient and venal ruler that favours another group is enough to discipline supporters. The model predicts extensive use of patronage, ethnic bias in taxation, and spending patterns and unveils a new mechanism through which economic frictions translate into increased rent extraction by the leader. These predictions are consistent with the experiences of bad governance, ethnic bias, wasteful policies, and kleptocracy in post-colonial Africa.

We consider a game between a principal, an agent, and a monitor in which the principal would like to rely on messages by the monitor (the potential whistleblower) to target intervention against a misbehaving agent. The difficulty is that the agent can credibly threaten to retaliate against the monitor in the event of an intervention. In this setting, intervention policies that are responsive to the monitor’s message provide informative signals to the agent, which can be used to target threats efficiently. Principals that are too responsive to information shut down communication channels. Successful intervention policies must therefore garble the information provided by monitors and cannot be fully responsive. We show that policy evaluation on the basis of non-verifiable whistleblower messages is feasible under arbitrary incomplete information provided policy design takes into account that messages are endogenous.

In 2002, U.S. President George W. Bush initiated the deployment of a new ballistic missile defense system. 1 The move triggered vociferous international concerns, including a recent statement of Russia and China condemning U.S. plans as a destabilizing move. 2 Indeed, the move amounts to a withdrawal from the 1972 Anti-Ballistic Missile treaty. The U.S. position is that such missile defense systems only reduce the damage caused by an incoming strike, and therefore do not threaten international stability. This paper provides a careful formal analysis of how the unilateral acquisition of defensive weapons may affect the sustainability of peace. We consider a dynamic game in which two symmetric countries repeatedly decide to be peaceful or to attack. Peace is sustained in equilibrium by trigger strategies in which attacks are followed by permanent conflict. Under complete information, peace is sustainable if and only if the value of continued peace is greater than the temptation of launching a surprise attack. Because defensive weapons limit the possibility of retaliation, the unilateral acquisi-

We posit that autocrats introduce local elections when their bureaucratic capacity is low. Local elections exploit citizens’ informational advantage in keeping local officials accountable, but they also weaken vertical control. As bureaucratic capacity increases, the autocrat limits the role of elected bodies to regain vertical control. We argue that these insights can explain the introduction of village elections in rural China and the subsequent erosion of village autonomy years later. We construct a novel dataset to document political reforms, policy outcomes, and de facto power for almost four decades. We find that the introduction of elections improves popular policies and weakens unpopular ones. Increases in regional government resources lead to loss of village autonomy, but less so in remote villages. These patterns are consistent with an organizational view of local elections within autocracies.