All politicians, regardless of the nominal form of government within which they operate, face the trade-off between current period gains and tenure extension. That is, rulers can exploit their power for personal gain, but they risk being removed from their positions of power, either through a popular vote or a coup or revolution. If they temper their exploitation to remain in power, they sacrifice some of their current personal gain. Essentially all politicians are limited autocrats, where the limitations imposed on them differ according to the institutional structure under which they rule. This paper presents a formal model of this trade off in the Mancur Olson stationary bandit framework, where tenure length is explicitly endogenized in the politician’s maximization problem.
Review of Law & Economics
1 Rev. L. & Econ. 293 (2005)