Aslam_Dictatorship Paper Feb 2010

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Doctoral Working Paper Series

Non-Democratic Regimes As Bargaining Process

Ghazia Aslam

0910-001

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Non-democratic regimes as bargaining process

(Work in progress)*

Ghazia Aslam

Abstract

Many questions about the characteristics of dictatorships and the process and likelihood oftheir transition towards democracy remain unanswered. In this paper, we contend that inorder to get a comprehensive picture of a dictatorial regime and its prospects ofdemocratization, we need to highlight the importance of free activity in the strategicinteraction between the dictator and the citizensthe dynamics of bargaining, for the

reaching of understandings and misunderstandings, for accommodation and co-operationand for conjectures about each others decision processes, value systems and information(Schelling, 1961). We specifically analyze three strategies that participants use underdifferent circumstances in an attempt to achieve their most favorable outcome: changingthe payoffs of the opponents, burning money by a participant to signal his intentionsabout the future action and the use of brinkmanship. In doing so, we learn about thebehavior of the participants that usually remains out of reach of straightforward analysis.

The framework generates a variety of potential behavior within a framework of a fewvariables and constraints and is therefore able to generate hypotheses about relationshipsamong various variables of interest.


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Dictatorship as bargaining process

Dictatorial regimes differ significantly among countries, for example with regards to thepresence of seemingly democratic institutions or their path towards democracy. Somedictatorships are politically stable without significant incidence of repression while others

remain unstable, and still others peacefully transition to democracy. Conversely, thesedifferences can be viewed from the perspective of the dictator. Some dictators manage tosurvive while others leave office or are forcibly removed. Since at least Machiavellis time,historians have pondered these matters. Recently, political scientists and constitutionaleconomists have examined these questions by constructing theoretical frameworks in anattempt to isolate the effects of personality, cultures and crises that infuse politics inhistorical settings. While these theories have greatly enhanced our understanding of theworkings of dictatorial regimes, some important questions remain unanswered.

Most of the research more or less agrees that the survival of the dictator and the process ofpolitical transition is a game of strategic interaction between the dictator (and the elite) andthe citizens (or a narrower group of citizens). The seemingly democratic institutions, forexample the legislature and political parties, therefore, indicate the culmination of the

negotiation process (Acemoglu and Robinson, 2005) or are channels that are used asinstruments of negotiation (Gandhi and Przeworski, 2006). However, we still do notunderstand why in some countries dictators collude with a narrow group of elites while inothers the seemingly democratic institutions target a wider group of citizens. For example,Gen. Musharraf of Pakistan allowed a vibrant legislature elected through adult suffrage tooperate more or less independently for six year of his nine year rule where oppositionparties debated politically controversial issues.1 On the other hand, Al Maktoum of Dubailimited himself to devising a consultative assembly selected by a hand-picked electorate ofseveral thousand dignitaries (Wallis, 2006). Similarly, we have not systematically identifiedthe factors that make the overthrow of a dictator more probable through popular uprisingthan by the ruling elite. The characteristics of democracy, for example in terms of itssustainability and inclusiveness, which emerge after the transition, are also notsystematically linked to its process.

We contend that in order to get a comprehensive picture of a dictatorial regime, we need tohighlight the importance of free activity in the strategic action between the dictator andthe citizensthe dynamics of bargaining, for the reaching of understandings andmisunderstandings, for accommodation and co-operation and for conjectures about eachothers decision processes, value systems and information (Schelling, 1961). In this paper,we attempt to present a theoretical framework that will be able to incorporate the aboveelements. Our concern, therefore, is not to establish or search for mutually beneficialoutcome in the strategic interaction between dictators and citizens. Rather, we start fromthe assumption that such an outcome exists and analyze how the participants divide thesurplus, what strategies they use in an attempt to secure their most preferred outcome,what factors affect their bargaining power and what exogenous factors are important indetermining the outcome. We specifically analyze three strategies: changing the payoffs ofthe opponents, burning money by a participant to signal his intentions about the future

action and the use of brinkmanship.

In doing so, we learn about the behavior of the participants that usually remains out of reachof straightforward analysis. The analytical regime helps to generates a variety of potentialbehaviors within a framework of a few variables and constraints and is able to generatehypotheses about relationship among various variables. While empirical application of theframework is outside the scope of this paper, frequent referrals to the actual historicalexamples keep the theory in real-world perspective.

1 For example, see various reports published by the Pakistan Institute of Legal Development and Transparency(PILDAT).


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2. Literature:

The theories in the existing literature that attempt to model dictators behavior agree thatmutual gain is possible as a result of exchange between the dictator and citizens (Wintrobe,

1998), elite and the citizens (Acemoglu and Robinson, 2005), dictator and a select group ofelite in the society (Gandhi and Przeworski, 2006; Bueno de Mesquita et al; Svolik, 2009;Schofield and Levinson, 2008; Congleton, 2010). Generally the idea is that dictator andcitizens exchange political support for decrease in the extent of repression. This exchangemakes the life of a dictator less vulnerable to conspiracies, military coups, and violentrebellions and reduces the extent of repression on citizens. The mutual agreement alsoallows the dictator to increase his rents by relying on the support of bankers to loan themmoney, peasants to produce food, and scientists to do research (Gandhi and Przeworski,2006) and citizens (or specific groups of citizens) to receive rents from the dictator. 2

However, all the researchers agree that these mutually beneficial exchanges rarely occurbecause promises are not enforceable. The absolute sovereignty of the dictator theunlimited discretion by definition means that there cannot be any judges or other sourcesof power in the society that the autocrat cannot rule (Olson, 1993). In other words, dictatorsand citizens (or the elite ruling coalition) have a problem of credible commitment (Northand Weingest, 1989), of enforcing commitments (Przeworski, 1991) or of moral hazard dueto the asymmetry of information (Svolik, 2009).

Acemoglu and Robinson (2005) suggest that this credible commitment problem can besolved only by establishing democratic institutions (akin to democratization) while otherscholars have put forward more innovative measures by which the dictator is able tocredibly commit to citizens (or smaller coalition of citizens) to enforce his part of theexchange. Bueno de Mesquita et al (2003) suggest that the ruler offers private goods (muchthe same as efficiency wages) to his coalition to gain their loyalty. Efficiency wages act as acredible commitment by the dictator because each member of the winning coalition is notassured of this exclusive supply of private goods that he receives if he were to leave thecoalition. Gandhi and Przeworski (2006) contend that dictators attempt to co-opt politicians

by allowing the establishment of legislatures where the positions in the legislature conferparticipation in policy making and offer other perks and privileges.3 Magaloni (2008) arguesthat the dictator delegates control of the power positions and the state privileges to anothergroup, for example an opposition political party, to create its stakes in the system. Otherscholars, such as Kirstein and Voigt (2006) argue that the agreement between the dictatorand the citizens is self-enforcing so that the dictator maximizes his revenue subject to theextent of the effort exerted by the citizens. Different scholars identify a number of differentexogenous factors that affect the effectiveness of solutions to the commitment problem.4

The establishment of institutions, access to power, efficiency wages and the othermechanisms that have been suggested are only indicators and consequences of anagreement reached between the dictator and the citizens. The fundamental question that

2

A slightly different approach is presented by ODonnell and Schmitter (1986) and more recently by Przeworski(1991). These scholars argue that democratization is a bargaining process between the reformers in thegovernment and moderates in the opposition. The reformers and the moderates bargain over the extent of politicalchange, with the reformers attempting to preserve as much power as possible and the moderates trying to get asclose to democracy as they can. At the same time, hard liners in the government and radicals in the oppositionhave to ratify the bargaining decision reached by the former two groups.3 In their analysis, creating a legislative assembly is a dominant strategy only in the conditions where opposition is

strong and ideologically polarized.4 For example, Acemoglu and Robinson (2005) identify the extent of inequality in the society and the cost ofrevolution to the citizens that affect the effectiveness of threat of revolution. Kristen and Voigt (2006) suggest thatthe enforceability of self-enforcing equilibrium improves as the cost of revolution decreases and the cost ofrepression increases.


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remains unanswered is: what is the process by which this agreement is reached? Only byanswering this question would we be able to identify the range of variables includingstructural factors, characteristics of the players and the historical factors that are importantin explaining the characteristics of dictatorship and the process of transition towardsdemocracy. The scholars that model these interactions assume that each participant hascomplete information of their own and the other participants payoffs. In the case of

complete information, the outcome of the interaction can be determined by looking forwardand reasoning backward even before the game begins. In real life, however, the informationavailable to each participant is incomplete and asymmetric. Incomplete and asymmetricinformation induces strategic actions by both players in an effort to bend the outcome intheir favor. This strategic behavior makes the outcome of these games uncertain andprovides us with an opportunity to observe the effect of a number of environmental factorsincluding communication channels between the participants and various characteristics ofthe players.

The purpose of this paper is to incorporate these elements in modeling dictatorship and toexamine how their inclusion affects the outcomes in terms of characteristics of dictatorship,durability of the dictatorial regime and the possibility of transition towards democracy.

3. Framework:

We argue that the dictator interacts with more than one player over a number of periods.These cumulative games across players and over time determine the working of thedictatorship and especially its prospects of transitioning into democracy. The correspondingplayers can be identified as political elites, owners of different factors of production (forexample, entrepreneurs, and capitalists), broad groups of citizens (for example, lawyers,and intellectuals) and ethnic groups and citizens.5 However, the game we present in thissection is with a generic group that we call citizens which can be substituted with anygroup to observe the strategic interaction between that specific group and the dictator. It isessential to allow the dictator to discriminate among groups. Various groups offer distinctadvantages to the dictator in different contexts, therefore it is imperative that the dictatorwill behave differently towards them. The cumulative outcome of these games acrossgroups of citizens and over time will be discussed in the next section.

As mentioned above, our primary purpose is not to establish that a mutually beneficialoutcome exists but to observe how the process of negotiation and bargaining over thedivision of surplus takes place once it has been established that exchange surplus exists.

Therefore, the objective of the basic model is only to present us with a framework whichcould then be used to observe the influence of different variables on outcomes of theinteraction between the dictator and the citizens.

A. Strategies:

In our framework, both dictator and citizens have two strategies. They can either concede totheir opponents offer (or demand) or retaliate. The core elements of contentions betweencitizens and dictators are primarily institutional arrangements that distribute decisionmaking authority, establish redistribution rules, autonomy over allocation of resources(through market or through state) and the legal status of the discourse regarding underlyingphilosophical ethos of the society. Therefore, the concessions and retaliation by the citizensand dictator are couched in terms of these objectives. Both actors can use different

5Generally collective action problem suggests that citizens cannot form a coherent group based. Many researchers

who model dictatorships do not include large group of citizens in their calculus (for example, see Bueno deMesquita et al, 2001), while other researchers have argued that citizens only have transitory de facto power(Acemoglu and Robinson, 2005). However, we have observed many movements sustained by participation frombroad based citizen groups. We will discuss some of these instances in detail in later sections.


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mechanisms and instruments to indicate concession and retaliation. The dictator, forexample, can concede to the citizen by transferring rents (Mesquita et al, 2001; Bertocchiand Spagat, 2001), through policy concessions (Gandhi and Przeworski, 2006) or by grantingaccess to powerful positions in the government (Magaloni, 2008). On the other hand,retaliation by the dictator includes restrictions on the citizens which are enforced throughimprisonment, torture and in extreme cases execution. In the case of citizens, conceding

implies accepting the rules set by the dictator and retaliation means the defiance of theserules, which can take many forms including strikes, demonstrations, rallies and riots.Effectively, the aim of the retaliation by the citizens most often is to achieve a smalloperational change rather than an overhaul of the governance structure.

However, in the framework below, we simplify the strategies to mean accepting or rejectinga tax rate offered or demanded by the other participant. Nonetheless, it is important to keepin mind the broader definitions of these strategies for later discussions.

We assume that the group of citizens share total product, a proportion of which is taxed by

the dictator. In the status quo the tax rate is . The total income generated for this

tax rate is . The total tax revenue that the dictator receives equals , while the disposable

income of the citizen group collectively is In each period, the dictator has two

strategies. He either concedes, which means that the tax rate does not change or he can

retaliate by increasing the tax rate to so that For the tax rate , the income

generated is and the disposable income of the citizens is . Similarly,

citizens have two strategies. They can either concede to the tax rate proposed by the

dictator or they can retaliate and demand for such that 0< The total

income generated for this tax rate is . We do not know anything about rankings amongst

, and since that would depend on the production function and the marginal rate of

substitution between leisure and labor. However, we know that , where is

the utility function of the group of citizens.

The cost of retaliation for citizens is equal to . We assume that if citizens retaliate they areable to obtain their preferred tax rate. Similarly, the cost of repression to the dictator isequal to r. According to this payoff structure, a one time game between dictator and citizenscan be constructed as follows.

B. The game

Chart 1: Basic one-time dictatorship game

Dictator

Retaliates

Citizens Citizens

Retaliate

Retaliates Concedes

Retaliat Concede ConcedeRetaliat

, , ,


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It is easy to see that the threat of revolution is binding if:

Or

The right hand side of the equation is the potential amount of income lost due to highertaxes and it depends on the slope of the Laffer curve. In other words, the frequency withwhich we will see the revolutionary constraint to be binding depends on the extent to whichthe disincentive of higher taxes translates into a loss in total revenue through the productionfunction slope of the labor leisure supply curve.6

However, an important observation that is derived from the above framework is that dictatorfaces different constraints when bargaining with different groups of citizens as theproduction function and marginal rate of substitution differ across groups.7 These differencesare motivated by a number of different variables that include the profitability of the factorsof production owned, level of income, and cultural attitudes towards work and leisure. Forexample, citizens living at the subsistence level of income have an inelastic supply of laborcompared to a group that has a higher income. Therefore, it would be easy to exploit them

as the loss in the total revenue due to a higher tax rate would be much lower compared tothe instance when a higher tax is imposed on a group with inelastic labor supply. Similarly,for the citizens who have inelastic labor supply, the cost of the revolution will have to bemuch lower for the revolutionary constraint to be binding. As a result, it is more likely that adictator will concede to the group of citizens whose total product is elastic to changes in thetax rate as opposed to the group whose total product is inelastic.

The game also shows that revolution and repression are wasteful activities that decrease thesize of the total pie that is to be distributed between the dictator and the citizens. In otherwords, equilibria with repression and revolution are Pareto inferior outcomes. For eachparticipant, the equilibrium where repression or revolution is part of the outcome isdominated by the outcome without repression or revolution.8This argument is similar to thecontention found in the formal work on the causes and conduct of war. For example, Fearon(1995) shows that in the case of war, the costs and risks of fighting open up a wedge of

bargained solutions that risk-neutral or risk-averse states will prefer to the gamble of

6Our results are stylistically similar to Acemoglu and Robinson (2005). In Acemoglu and Robinson (2005) elites

loose income as a result of revolution because of redistribution the extent of which depends on the degree ofinequality between the elites and the citizens. While in this framework, the loss of income for the dictator isdetermined by the disincentive to work due to higher tax rate. It is very obvious that shape of the productionfunction and work attitudes of citizens significantly affect the outcome of the game and their consideration willsignificantly enrich the framework. However, the scope of the paper does now allow us to analyze theserelationships in detail.7

It is easy to see more elastic the total revenue is to changes in tax rate (assuming constant return to scale

production function with respect to labor), right hand side of the above constraint would be larger and greater therange for revolution constraint to be binding which is expected to increase the frequency of revolution constraint

being binding. For example, when total revenue is perfectly inelastic to changes in the tax rate (

revolutionary constraint is as follows:

While when the supply is perfect elastic ( ), revolutionary constraint becomes:

And we know that

Therefore, the cost of revolution has to be much smaller for the group with inelastic supply than the group withelastic supply for the revolution constraint to be binding.8 This observation is very different from saying that both participants would prefer (concede, concede) strategies asit saves resources that are to be spent on either revolution or repression or both in other possible paths of thegame. This observation only means that citizens and dictators would always prefer no revolution or repression overrevolution or repression.


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conflict. The existence of an ex-ante bargaining range derives from the fact that war isinefficient ex post.9 Bargaining, in the sense described below, therefore does not only helpthe participants to achieve an equilibrium with their highest payoff but also results in aPareto superior outcome overall.

C. Incorporating bargaining

Changing the payoffs

Changing the payoffs of the opponent is the most common strategy used by a player toaffect the outcome of the game. In the dictatorship game discussed above, we assumed thatthe cost of revolution () is an exogenous factor. However, in reality dictator has the powerto influence this variable. The biggest factor in the cost of revolution for the citizens is theproblem of collective action. The dictator can affect coordination among citizens by affectingthe communication methods among them. In fact, this is the first step that the dictator takes

(in the form of banning television, blocking cell phone signals, blocking access to internet)when faced with threats of retaliation by the citizens. There are numerous historicalexamples of imposition of such restrictions at the time of revolution.

Communication among citizens is not only necessary to credibly threaten revolt and toactually carry it out, but also at a time of relative peace, communication amongst citizenscan create a shared perception about the acceptability or otherwise of a regime which inturn can act as a credible signal of citizens intentions.10For example, a common perceptionof the agreeability of a dictator among the population at large acts as a credible promise ofloyalty on part of the citizens. Similarly, if society in general does not accept the regime ofthe dictator, this perception attains a certain degree of credibility as a threat. Therefore, it isin the interest of the dictator to restrict media and other forums where views of citizens canbe coordinated. There are many examples of such restrictions in non-democratic regimesfrom Latin America to South and East Asia.11

9Fearon (1995) shows that the only assumption needed for this result to hold is that both states know that there is

some probability that one state would win in a military contest (which can be different from their own estimates)and that the issues in dispute are divisible.10 Schelling (1960)s focal point effect explains how shared perceptions can be socially decisive. Schelling argued

that, in games that have multiple Nash equilibriums, any cultural or environmental factor that focuses peoplesattention on one equilibrium can make it rational for everyone to act according to this equilibrium, as any singleindividual would suffer from deviating unilaterally. This means that it is possible to create common perceptionsamong a population without necessarily creating rationales for such perceptions as long as deviating from thatshared perception is costly for a single individual. This inclination of masses to follow a shared perception induces acommon perception.11

The restriction of media and other communication mechanisms (for example, internet) are so common that

several scholars have included open media as an explicit requirement of a regime to qualify as a democratic

regime. For example, see Dahl (2005) and (Przeworski et al, 2000). For the sake of illustration of the kind of

restrictions that exist in dictatorial regimes on media, consider media restrictions on three countries. The regulatoryagencies in most countries provide a legal mechanism to control the activities of media. Some examples are

Pakistan Electronic and Media Regulatory Agency in Pakistan, Ministry of Information Industry in China and

Zimbabwe Mass Media Trust. The second, most popular yet subtle instrument of control is the self-censorship

induced by the punishment imposed on media agencies if covert rules are not followed. For example, see Zamir

Niazis Press in Chains and Web of censorship for an illustration of how media follows self-censorship. The third

most blatant mechanism of restricting media is to prioritize the security, honor and interests of the motherland

(the constitution of China) above the freedom of expression through media. The aspect significantly affects the

independence of media by providing an easy excuse to the government to penalize a transgression in covert rules.

Most recently, internet as an effective forum of communication has also come under strict regulation of the

dictatorial regimes. Council on Foreign relations reports that Chinese government deploys at least twelve agencies


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Other than directly sabotaging or destroying the communication systems among hisopponents, the dictator can also weaken the cohesiveness of the opponent group byreducing its ability to challenge the government. The primary strategy used by the dictatoris buying off or co-opting some members of the group by offering them perks andprivileges in return for their support for the regime. Co-optation creates insider-outsiderdivisions and generates competition among the opposition members for access to the scarce

insider positions. This practice ultimately reduces the clout of the opposition by reducingtheir ability to challenge the dictator.

The primary mechanism for co-optation is through the creation of political parties (Lust-Okar, 2006) which are the hallmark of dictatorial regimes. Boix and Svolik (2007) report thatabout 60% of dictatorships have relied on a political party to organize political support.Similarly, Gandhi (2008) observes that about 81% of the dictatorship years12 operated withone or more parties and 59% of the dictatorship years operated with multiple parties. Mostof these parties are established after deactivating the current political apparatus13 andprovide an opportunity and forum to the current members of the polity or different groups ofcitizens to realign their incentives to match with those of the dictators. Other than leavingaccess to insider positions open so that different groups of citizens compete for them, thedictator can also selectively co-opt some members of the opposition.14

Although less commonly recognized, dictators also foster divisions among groups to weakenthe opposition against their regimes by reinforcing ethnic, regional and religious differencesthrough the unequal distribution of resources. As long as these opposition groups appearmore threatening to each other than the dictator himself, the dictators position is secure.

The divided groups of citizens focus on each other in their political struggle. This leaves thecenter of political power uncontested and even regarded as a necessary guarantor ofpolitical stability (Wegner, 2007).15 Many historical examples suggest that dictators haveindeed used this mechanism to alleviate the opposition to their own regime.16

to enforce a wide array of internet regulations directed at service and content providers (McMohan, 2008; Zissis

and Bhatarjee, 2008).12 Dictatorship year as a unit of analysis in a country is identified if the country was ruled by a dictator in that

particular year.13 For example, in Egypt, The Liberation Rally Revolutionary Command Council (RCC) was created after the regime

deactivated the existing political parties (Brownlee, 2007). Similarly, in Pakistan the creation of Pakistan MuslimLeague (Quad-e-Azam) group was created following the suspension of constitution and the establishment of theChief Executive office which was to be occupied by the Chief of Army Staff.14

While selective co-optation reduces the transaction costs, competition is able to provide better information about

the ability of different groups of citizens to provide benefit to the dictator. Many dictators have attempted tomaintain some kind of competition for the insider positions. For example, after the 2000 elections in Egypt whereNational Democratic Party (NDP) the political party associated with the regime -- suffered defeat at the hands ofindependent candidates, Gamal Mubarak introduced an ostensibly meritocratic method for selecting candidateswithin the party. Beginning with the Consultative Assembly elections and later extending to local council contests,the NDP instituted electoral caucuses in which party members voted for the candidates they wished to see on theballot. The caucus system expanded the network of participants in decision making but functioned mainly as anomination mechanism. Caucus results were binding on NDP members (Brownlee, 2007).15

Wegner (2007) discusses what strategies the dictator should use to maximize these differences. For example, hesuggests that the dictator needs to maximize the distance between the two groups preferred policies and alsoensure that both sides have reason to fear that the other could be strong enough to gain concessions.16

In Jordan, during King Husseins regime, Brand (1999) has argued that the state allowed the tensions between

the leftists and Islamists to flare periodically in order to weaken the opposition: The stoking of communal flames[was] a policy instrument to be used when there [was] a possibility that some challenge, generally, but notexclusively economic, could lead to a broad based Jordanian-Palestinian opposition to the regime, perhaps alongthe lines of the nationalists wave that emerged in the 1950s. Indeed, opposition elites from different sides of theideological spectrum were aware of this, and they actively worked against the monarchs attempts to divideJordanian society (Lynch, 1999). Playing of societal groups against each other is an important containment strategy(Brumberg, 2002). Similarly, religious polarization in Oman was encouraged by the sultan in the late 1990s. Thewithdrawal into narrow identities has given rise to the repolarization of Omani society (Valeri, 2007). In Morocco,the monarchy allowed the Islamists to gain strength up to the point where they could be a threat to the loyalistopposition and yet remained too weak to be in independent threat (Lust-Okar, 2007). Similarly in Pakistan, all thedictators have reinforced regional differences, sometimes politically and financially supporting previouslymarginalized regional political parties to counteract the clout of national political parties.


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Burning to signal

In the above model we assumed that both the dictator and the citizens know if therevolution constraint holds or not. However, this information is not always available orvisible to both participants. In these circumstances, participants indulge in pre-playcommunication to signal their intentions regarding future actions. Ben-Porah and Dekel(1991) construct games where some players have the option of signaling future actions by

incurring cost or burning money.17In the context of dictatorships, for example, citizens canburn money (and effort) in the form of planning for revolution (holding meetings,processions), protest demonstrations and criticizing the regime in public to signal that theywill revolt if their demands are not met. In the context of our model, burning by citizens canbe demonstrated by extending the game to include a signaling stage before the actualgame. The game is displayed in chart 2 where we assume that citizens burn the amount before the game starts.

Now the payoff structures suggest that if the citizens burn then it must be true that therevolution constraint is binding and that they are planning to revolt, since otherwise theywould never be able to recuperate the amount of resources burned during the signalingstage. Burning and then retaliating is strongly dominated for citizens by not burning andretaliating. Hence, if citizens burn and the dictator observes that burning, the dictatorshould then conclude that citizens will retaliate, which would then lead the dictator toconcede. There have been many instances in history where dictators have conceded to thedemands of the citizens at the very early signs of riots and demonstrations. One suchexample is the initial stages of Velvet revolution in Czechoslovakia. The attitude of both theparticipants shows that citizens demonstrated or burned to signal that the revolutionconstraint is binding and the regime accepted this signaling by agreeing to the concessionsdemanded by the citizens.18

However, the ability and the right of the citizens to signal are important and so is the abilityof the dictator to hamper the ability of the citizens to signal. The simplest way to restrict theability of the opponent to signal is by cutting off communication with him. When citizens areaware that the dictator does not know that the revolution constraint is binding, then theyare again faced with a situation of incomplete information. Citizens are then left with limitedoptions. They can either indulge in costly revolution or wait for the dictator to take the first

move.19

Brinkmanship20

Brinkmanship is defined as the ability of an aggressor to undertake an observable actionthat will lead with positive probability to some mutually undesirable outcome (Schelling,1984; Schwarz and Sonin, 2007). In the context of our game, consider that the revolutionconstraint does not hold, so that by backward induction the expected outcome is that thedictator retaliates and the citizens concede. In this situation, the payoffs are as follows for

the dictator and citizens respectively: and . Now if we assume that

citizens, given the production function and their marginal rate of substitution between labor

17 The idea of using costly signals to convey private information has been researched extensively at both thetheoretical and in applications. For example, education can act as a signal of quality of a worker (Spence, 1971).Similarly, Cho and Kreps (1987) studied a general class of such signaling games in which a player incurs cost tosignal her private information about a move by nature. However, the idea that burning can be used to signal futureactions rather than just private information has remained understudied.18

Ginkel and Smith (1999) report that the government was reluctant to punish dissident activity. The communistregime allowed protest organizations to meet with little disruption. Its repression seemed inefficient and its effortsto co-opt certain protests appeared as concessions to the opposition (Ginkel and Smith, 1999). However, as withtime, demonstration grew larger, the government resorted to violence and arrested a number of prominentpoliticians. This change in the behavior of the dictator will be discussed in next section. However, thedemonstrations that culminated in Civic Forum achieved the removal of the clause that designated leading roleto the Communist party in state affairs from the countrys constitution.19

Another implication of this strategy is the incentive it gives citizens to bluff about their capability to retaliate.20

Most of the insight for this section is borrowed from Schelling (1960).


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and leisure, prefer lower taxes rather than higher taxes, then their preferred outcome is thatthey concede and the dictator concedes. They can achieve this outcome only if they canconvince the dictator by re-arranging and displaying their own incentive ex ante that theywould, ex post, retaliate. The dictator strictly prefers the outcome (concede, retaliate) to

(retaliate, retaliate) for which the payoffs are and respectively, and if he

believes that the citizens will retaliate he will concede. This, in turn, will lead the citizens to

concede. If the threat is successful, citizens get minus the cost that they incur todisplay their commitment to revolt which is expected to be a proportion of their cost ofrevolution. In other words, citizens bargain on the potential or threatened loss of the dictatorto induce him to concede to them - a circumstance that is less costly for the dictatorcompared to that of a citizens revolt. There are many historical examples of brinkmanshipwhere different groups of citizens threaten riots or processions against the dictator only toagree to a process of negotiation at a later stage. Strikes are a classic example ofbrinkmanship (Schelling, 1960) and are also observed frequently in non-dictatorial regimes.Strikes have brought down regimes, for example, Francoist Spain (Marvall, 1978).

An event indicative of the use of brinkmanship is the Tiananmen Square massacre. Morethan a million students and other groups of citizens gathered in Tiananmen Square todemand democratic polices from their government. The government, however, crushed the

movement by employing military force. The episode resulted in a substantial loss of life.Before the protesters gathered in Tiananmen square, the government had issued severalwarnings stating that the participants of the protest will face grave consequences if theywent ahead with their plan. The regime had not shown any concession to the demonstratorsbefore the protests, and yet the protestors persisted. Calhoun (1994) suggests that theselarge protests in defiance of official warnings were not spontaneous events. Thesecircumstances suggest that the protestors realized the potential danger for themselves andthe costs protests would impose on the government. However, they still went ahead in aneffort to credibly threaten the government that the citizens would retaliate in allcircumstances thereby forcing the government to concede to their demands.21 Thegovernment, however, crushed the movement to make a reputation of brutality for itself.Foran (1997) suggests that the government could tolerate student demonstrators; whatterrified it was the organization of the working class into independent unions (p: 802)

indicating that the actual target of this massacre was a credible signal to the opponents ofthe regime that the dictator would retaliate in the future if citizens retaliate. This strategyproved to be successful as the moment of revolution in China may have passed with themassacre of 1989 (Foran, 1997, p: 803).22

21 Ginkel and Smith (1999) argue that Chinese protestors did not know have the information about the probableattitude of the government (its payoffs and probabilities). However, numerous official and formal warnings beforethe protest negate this argument. Chinese protestors were hoping that they would be able to break the governmentand did not base their protests on the gamble that the government was already broken.22 Another example of brinkmanship by citizens (a group of citizens) is the brinkmanship played by the judiciary inPakistan. The Supreme Court of Iftikhar Chaudhry openly challenged the military dictator by deciding manyimportant cases against his coalition partners. The important cases that earned Chief Justice a reputation ofchallenger of the government (and good will of the civil society) include: Steel Mills Case (Constitution Petition No. 9of 2006 and Civil Petition Nos. 345 & 394 of 2006; On appeal from the judgment/order of High Court of Sindh atKarachi dated 30.03.2006 passed in Constitution Petition No. D-240 of 2006) that nullified the sale of the PakistanSteel Mills arranged by the then Prime Minister of Pakistan on the basis of mala fide intent and New Murree

Development Case (Constitution Petition no. 36 of 2005) that prohibited further construction on a residential projectwhich was being pursued by the Punjab government. The most significant was the role of the Supreme Court in thecases of disappeared persons in the aftermath of the start of United States offensive in Afghanistan. The SupremeCourt interrogated the executive about the whereabouts of disappeared persons. Within a year, the Courtintervention led to the of about 189 persons from the total of 458 cases. they were either released or held inknown detention center. In addition to these direct actions, actions of the court on a number of administrativeissues as mentioned above often necessitated summoning and reprimanding of senior government officials. Theentire police hierarchy, bureaucracy, politicians from the ruling as well as opposition parties, feudal lords andseveral incumbent rulers directly or indirectly came in the line of fire when Justice Chaudhry either gave decisionsagainst them or passed stern directions for them to comply with. Musharraf regime issued many warnings againstthe activism of the Supreme Court. The Court, however, continued to take actions that indicated to the regime thatit will continue to be active thus inducing it to play concede. The regime, however, did not take heed of the


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Similarly, the dictator can also trigger brinkmanship by threatening to undertake a massiverepression if the citizens do not concede to the dictators offer even if the repression costsmore than concessions to the citizens. Many governments in history have maintained powerby exploiting reputations of strength that were earned in earlier time periods, even thoughthey lacked the power to suppress a rebellion (Ginkel and Smith, 1999). If the citizensinitially believe that the government is strong enough to resist, then they never challenge

the government. As a result, there are few opportunities to learn whether their beliefs aboutthe government are correct, and the status quo supports the preservation of the existinggovernment. Therefore, many dictatorial takeovers are immediately followed by massivearrests and the crushing of any demonstration of dissent.23

The credibility of the threat is crucial in brinkmanship. As we see in the earlier example ofTiananmen Square, if the threat is not credible the situation can quickly deteriorate to theoutcome that is undesirable for both participants. Credibility in turn is affected by the extentand nature of the information about the values and personality characteristics of eachparticipant available to each of the participants. For example, in the case of a civil societythat has earned a reputation of being intolerant of a non-democratic regime, the threat ofrevolution by the civil society would be comparatively more credible without this reputation.Credibility can also be established by taking certain actions. 24 For example, if the mutuallyundesirable outcome grows with a probability that none of the participants can control, the

credibility of the threat increases significantly.25 The delegation of decision-making power toan actor so that the final outcome is not controlled by the threatener is a common strategythat is used to introduce uncertainty to the outcome. In the context of dictatorship games,citizens can leverage the coordination difficulties within the group to increase the credibilityof the threat. The argument is that once started, even the leaders of the revolution wouldnot be able to stop it. Therefore, it is in the interest of the dictator to not let the revolutionstart.

The dictator, on the other hand, has absolute discretion and cannot use the strategy ofdelegating decision making power to gain bargaining leverage. In many cases, however, thedictator operates within institutional constraints (for example, a military dictator). Aconstrained dictator, or a seemingly constrained dictator, has better bargaining power whennegotiating with the citizens. Indeed, we observe that the Argentine military did negotiate

an agreeable democracy, securing painful concessions from the oppositional moderates(Schofield and Levinson, 2008). On the other hand, Fracoism concentrated power in oneman (Schofield and Levinson, 2008) and therefore did not have much bargaining leverage(Marvall, 1978).

commitment of the Court and suspended Iftikhar Chaudhry from the post of Chief Justice in March 2007. Followingmassive public rallies, Iftikhar Chaudhry was reinstated only to be deposed again, this time through proclamation ofEmergency in the country. The decision of Emergency days before the Supreme Court was to rule on whetherPresident Musharraf was eligible to stand for re-election while still holding the Office of Chief of Army Staff. Thismove was clearly an attempt to thwart the brinkmanship initiated by the Supreme Court. However, continuousmovement by the lawyers and other sections of the society, including media, student activists and civil society for

two years following emergency were able to not only get Chaudhry Iftikhar reinstated but electoral democracy alsoreturned to the country.23

There are many examples of such events in the history. For the purpose of illustration, consider bullring

massacre of February 5, 1956 in Colombia where regime attacked and killed critics of the regime who dared todemonstrate their criticism of the regime in public (Dix, 1982).

24For more reading on credibility of threat, see Schelling (1960).

25In circumstances, where brinkmanship is spread over long periods of time, other factors also become important.

The factors such as the rapidity with which the size of the pie decreases, the ability of each participant to sustainlosses during brinkmanship, and the preference of each participant for the status quo affect the final choices of theparticipants and the outcome of the game. For details, see Schelling (1960).


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Chart 2: Burning to signal future actions

Citizens

Dictator

Citizens Citizens

Dictator

Citizens Citizens

Retaliates Concedes

RetaliatConcede ConcedeRetaliate

, , ,

RetaliatesConcedes

RetaliatConcede ConcedeRetaliate

, - , - , -

Do not

Burn


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4. Cumulative games:

The discussion above suggests that a number of factors affect the interaction between thedictator and groups of citizens which determine the outcomes of a one-time game. The

communication system among players (among the group of citizens and between thedictator and the citizens), its reliability and the degree to which it can be controlled by eitheror both players determines the bargaining power of the citizens by affecting theircohesiveness and ability to signal their future actions. The other important factor is theexistence of potential differences among different groups of citizens that can be exploitedby the dictator. The greater these differences are, more opportunities there are for thedictator to divide the opposition against him, thereby reducing the ability of the oppositionto challenge him. This implies that if the identities of the citizens are not tied directly to thestate,26 but occur at multiple and various levels, then the dictator has a much greateradvantage when bargaining with the citizens as compared to situations in which societiesare homogenous or have strong links to the state.

Similarly, the organization of the political landscape determines the ability of the dictator to

co-opt different groups into his coalition. A political landscape that is based on patronage orthe localization of politics makes it really easy for the dictator to identify potentialsupporters of the regime. Patronage based politics also make co-optation very beneficial forthe dictator.27 History is another factor that is significant in determining how the game isplayed. History affects the amount of information each participant has about the otherparticipant(s). The information about the personality and value systems of participantsdetermines the credibility of their threats and promises and also reduces the opportunity toexploit the hidden information by either of the participants. Over time, dictators and variousgroups of citizens can also develop norms and behaviors that allow them to signal theirintentions about their future actions without sacrificing resources. As time goes by, thereliability of these signals improve, and misunderstandings become less likely.

When the game is played simultaneously with a number of players over many periods, otherfactors also affect the course of the dictatorship.

Across groups of citizens:

The most obvious variable is the distribution of the types of groups. We have alreadyidentified work attitudes, income levels and the profitability of various factors of productionthat belong to the groups of citizens as significant in determining the bargaining power ofdifferent groups of citizens. The groups also differ in the kinds of demands that they make tothe dictator and in the types and extent of the benefits they offer to the dictator. Therefore,the types of groups that the dictator bargains with is going to determine the likelihood andkind of institutions that are established (or not established) as an indicator of bargainingprocess.

26To illustrate the issue of divided identities, we can also say that the social contract or citizenship contract

between the state and the citizens is not strong.27 In patronage political systems, the provision of services works through exclusive relationship between the voters

and the local elite (who could also be an elected official) and citizens where citizens receive different public servicesin return for their political support. Consequently, political support is largely on the individual elites influence in thelocality rather than ideology or policy position (Waseem, 2006). Political parties, in these systems, are reduced to amechanism of communication among the elites but are not able to provide a link between citizens and the state.Therefore, in this kind of political organization, the dictator only has to buy-off the elites support who would thenbring his clout to support the dictatorial regime.


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The major objective of a dictator in looking for corporation (as articulated in the rationalchoice literature and summarized in the first section) is wealth maximization for the regime,which also requires a certain degree of political legitimization. The extent of resourcesavailable to the dictator also works backwards as political legitimization can be establishedby the distribution of rents to the politically strong groups. Therefore, if a dictator has accessto significant sources of rent from the outside, and if that access is not dependent on the

cooperation of citizens in his own country, then we should not expect the dictator to bemotivated to exploit cooperation opportunities with the citizens. The dictator can establishtheir legitimacy on the basis of their distributive role alone.28 This explanation is called therentier state model. Another result of the constant access to rents from outside is that thedictator does not need to extract resources from the population (for example, throughtaxation) thereby rendering the regime less susceptible to revolts by other groups. Luciani(2007), however, argues that this is not entirely true for oil-exporting Middle Eastauthoritarian regimes.

In case the dictator needs the cooperation of groups from within the society, the dictatorstargets would depend on the methods of wealth production and the distribution patterns ofeconomic and political wealth. The dictators target those groups who are either productiveor politically powerful. In emerging market economies with large middle classes, workersand entrepreneurs are the first obvious co-optation target. On the other hand, in economiesthat are dominated by a handful of elites or where the ownership of the factors of productionis very concentrated, dictators gain most by co-opting these elites. Consider the variation inthe nature of co-opted groups in the following examples. When the military took over afterthe Peronist regime in Argentina, they needed technocrats to formulate macroeconomicpolicy, and the elites and middle classs acquiescence to implement the policy reform.Consequently, the military government provided huge concessions to these groups at theexpense of other groups. The regime reduced real wages by fifty percent, increased theprice of public services and ended subsidies for social services such as health and housing.

They also started a program of progressive reduction in import tariffs, liberalized exchangeand financial markets, and re-privatized state owned firms (Munck, 1985). On the otherhand, in Oman, the primary targets of co-optation were religious figures and technocrats,who were the major emerging sociopolitical forces at the time. Similarly, in Jordan KingHusseins regime co-opted an increasing number of political activists, members ofunderground parties and professional associations (Valeri, 2007).29

Strong media and civil society organizations are also an attractive opponent for the dictatorin the bargaining game. Civil society organizations, and especially the media, have thepower to spread opinions among citizens, which as discussed above can improvecoordination among citizens. Therefore, dictators usually find it important to control or co-opt a strong media.30 Another front that is usually found to be important in representing thelarger sections of society is the judiciary. Albrecht (2007) explains that the judiciary hasbeen repeatedly used by the opposition to challenge the state in Egypt. Spearheaded by

28Richter (2007) identifies following sources of rent which dictator can extract with the minimal cooperation of

other groups in the society: a) rent from the export b) location rents arising from the ownership of majortransportation facilities or traffic tours, such as the Suez Canal c) strategic rents, that is, grants and soft loans given

to countries in the form of military or budgetary aid d) political rents granted by donors to state institutions and civilsociety organizations for developmental or human rights-related purposes; and finally e) large inflows into thedomestic financial systems in the form of migrants remittances.29

However, it is important to note that dictators usually make isolated gesture of support towards masses to earn

legitimacy either through implementing favorable economic policies or by providing space for the masses indecision-making apparatus. For example, Nasser in Egypt, in pursuit of broad support from the lower socioeconomicclasses the National Charter approved by plebiscite in June 1962, established a quota of one-half electedparliament seats for peasants and workers (Brownlee, 2007). When Arab Social Union started acceptingapplications it received nearly five million registrants over its first twenty days (Brownlee, 2007).30

The media is controlled or co-opted by the dictator is reflected in the outcome of the game that the dictator andmedia play with each other. The important point to note here is that the dictator has an incentive to bargain withthe media.


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judges of the Court of Cassation, the Court has repeatedly demanded a free hand inelectoral supervision as well as independence from the Ministry of Justice. Similarly, inPakistan courts have helped to create conditions for democracy by acting as bulwarks forthe citizenry against the state (Newberg, 1995).

Over the tenure of a dictatorial regime, previously weak groups can also attain bargainingpower due to changing exogenous economic or political situations. For example, Maravall(1978) contends that economic growth, increasing industrialization and the consolidation ofcapitalization, which began in the mid-1950s, gave rise to a new worker class anddemanded alternative institutions in order to satisfy the new requirements. The regimeconceded to these demands, as changes in the institutional structures were significant, inorder to maintain production relations in the society. Congleton (2010)s primary thesis isthat in medieval Europe industrialization provided conditions for different groups to gainbargaining power viz-a-viz the King which gradually led to change in the institutionalstructure. Therefore, in order to survive it is very important for the dictator to be able toadapt to changes in economic, social and political distribution in the society due toexogenous and endogenous factors to incorporate interests, absorb oppositions, co-optcompetitors, build flexible coalitions, articulate cross-cutting and seemingly inconsistentpolicies, reconstitute privileged social networks, restructure property rights, andaccommodate the emergence of new institutions (Schlumberger, 2007, p: 35)

Ethnicity and other communal affiliations have also played an important role in identifyingthe potential allies in the political process. For example in Pakistan, dictators have favoredtheir own ethnicities. Chinioti, Kashmiris and Arains migrants from East Punjab were themajor beneficiaries of Zias benevolence and were able to establish themselves in thebusiness as well as the political system (Mahmood, 2003). 31 The dictators rise to powermay itself have been supported by certain groups which, at least at the start of thedictators tenure, became the primary target for bargaining.32

It is very important to note that the games that the dictator plays simultaneously with anumber of different groups are not necessarily independent of each other.33 For example,

the concession to one group may decrease the bargaining power of another group whoseconcession to the dictator is perfectly substitutable with the concession by the other group.

In this way, the dictator is able to leverage the game with one group of citizens to bargainwith another group. This dynamic also creates completion among groups. On the otherhand, conceding to one group may improve the bargaining clout of another group. Forexample, conceding to the demands of judiciary for independence increases the bargainingpower of other groups such as media and civil society who can count on an independentarbitrator for their debates with the regime. Similarly, if we assume that providing citizenswith economic rights increases their demand for political rights, the bargaining outcomewith the economic elite will directly affect the bargaining power of participants in gameswhere the concessions demanded are of a political nature.34 We discuss this more when wediscuss cumulative games over time.

31The case of Nawaz Sharif is the most prominent one. He was patronized by General Zia to counteract the political

influence of Pakistans Peoples Party. After the overthrow of the military regime, Nawaz Sharif founded his ownpolitical party and was elected the Prime Minister of Pakistan twice.32

General Manuel Odria in Peru came to power in a tacit alliance with Perus landed and commercial elites (Dix,

1992). Similarly, Gustavo Rojas Pinilla in Colombia assumed power with the connivance of the anti-Gomez wing ofthe Conservatives and the good wishes of most Liberals.33 This discussion should be read with the discussion on insider-outsider division in an earlier section.34

Since the dictator plays simultaneous bargaining game with a number of different actors in the society, it is verymuch plausible that his coalition partners come from disparate ideological backgrounds bound together by theirneed to bargain with the dictator to gain one or the other concessions. Brownlee (2007) suggests Mubarak in Egyptand Mahatir in Malaysia had to cohere disparate elites on one platform to thwart opposition to the regime. Heargues that their political parties were able to mediate among different partners of the coalition.


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The fact that there are interactions among the simultaneous games that the dictator playsleads to the observation that there will always be winners and losers the groups that areable to receive concessions from the regime and the groups who are not able to do so. Inother words, there will always be groups who are alienated from the regime and selectiverepression will exist simultaneously with liberalization or concessional policies. For example,Perons early years in power in Argentina were characterized by extensive wage increases

and other benefits for workers but increasingly repressive measures were taken against hisopponents in the press, the universities, and the courts (Dix, 1982). Heydemen (2007) alsoargues that in Egypt, Syria, Tunisia and Jordan, repression is directed against certain groupswho explicitly challenge the regime. Repression is usually observed as excessive in thehistorical literature when co-opted groups constitute a smaller portion of the society.

The alienated groups may come together to form a popular upsurge against the regime(ODonnell and Schmitter, 1986, p: 53-4) and present themselves as a single participant inthe bargaining game. However, as the tipping point literature suggests (Schelling, 1971;Granovetter, 1978; Kuran, 1989), some groups that form the collective front are betterestablished than others to carry out dissident activities (for example, in terms of their owncalculus which makes them more willing to revolt, and the cost of coordination among thegroup) and usually lead the movement. In fact, many bargaining games where broad basedgroups of citizens have won massive concessions against the dictator are comprised of

groups from many different fields which are led by one or two sub-groups.35

35For example, in Egypt National Front for Change brought together, under the auspices of the well-respected

former Prime Minister Aziz Sidiqi, the leading figures of the main opposition parties prominent representative ofthe civil society business, the Kifaya movement, and, most remarkably Muslim Brotherhood (Brownlee, 2007).Similarly, in Pakistan, media, human rights activists, student activists came together (March 2007 to Jun, 2009)under the guidance of lawyers to launch and eventually win the bargaining game to increase the independence ofjudiciary in Pakistan.


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Chart 3. Cumulative Dictatorship Games

Chart 3a. Stable Dictatorship Game:

Dictator concedes Citizens concede Stable Dictatorship

Retaliate

Transition game

Chart 3b. Repressive Dictatorship Game:

Dictator Retaliates Citizens concede Repressive Dictatorship

Retaliate

Unstable Dictatorship game


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Chart 3c. Unstable Dictatorship:

Dictator Retaliate Citizens Retaliate Dictator Retaliate Citizens Retaliate ------- transition tounstable democracy

Concede Concede Concede

Repressive Dictatorship Transition Repressive Dictatorshipgame

Chart 3d. Transition Game

Dictator Concedes Citizens Retaliate Dictator Concede Citizens Retaliate -------democratization withinstitutions

Concede Retaliate Concede

Stable Dictatorship game Unstable Dictatorship game Stable Dictatorship game


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Cumulative games over time:

The framework suggests a possibility for the emergence of consolidated democracy which isdepicted in the Transition Game (Chart 3d). It suggests that the dictatorial regime can betransformed into a democracy through incremental concessions afforded to different groupsof citizens which gradually broadens the boundaries of political participation. It is importantto note, however, that this process is not the result of deliberate actions on the part of thedictator aimed at democratic reforms. The change in institutional structure is only acontingent outcome of conflicts among the dominant forces and their exchange with eachother over time. This gradual model of transition towards democracy is supported by manyhistorical studies. In their landmark study of transitions away from authoritarianism,Guillermo O Donnell and Philippe Schmitter (1986, p: 15), saw a slippery slope fromliberalization to democratization. Brumberg (2002) calls the middle stage in the process oftransformation towards democracy liberalized authoritarianism. The contention of thegradual transformation to democracy as a result of concessions is also empiricallysubstantiated by the transitions of many countries towards democratization. Regime-initiated elections in the Philippines (1986), Chile (1988), Poland (1989) and Nicaragua(1990) ended in opposition victories and laid the foundations of democratic governance

(Brownlee, 2007). 36 Odria in Peru peacefully yielded office to an elected civilian not of hischoice at the end of his scheduled term in 1956 (Dix, 1982). Studying the emergence ofdemocracy in medieval Europe, Congleton (2010) also suggests that the establishment ofdemocracy was a gradual process as Kings incrementally gave up decision making power tothe parliaments.

Much of the above claim that gradual concessions to the citizens or groups of citizens canresult in a full fledged democracy is based on the argument that Once some individual andcollective rights have been granted, it becomes increasingly difficult to justify withholdingothers, (Guillermo O Doneenll and Philippe Schmitter (1986, p: 10). 37 However, it isimportant to note that dictators always have an option to change course and retaliate. Whileexogenous factors can change (for example, the influx of resources, change in thebargaining power of the participants or the post-power scenarios for the dictator38) the

outcome of the one-time game in the later periods, the time horizon of the dictator may also

36Brownlee (2007) expresses the same phenomenon in the following language: From Peru to Ukraine, electoral

defeats for dictators have become what military withdrawals were in the 1980s: a signal that power has shiftedfrom self-appointed leaders to popularly supported movements (p: 9).37

Along the same lines, Giuseppe DiPalma wrote that dictatorships do not endure (1990, p: 33), and Adam

Przeworski reasoned that liberalization is inherently unstable (1991, p: 58). These authors are quoted in Brownlee(2007). There is an implicit assumption in this statement that as dictatorial regimes grant rights to the citizens, thedemand for yet more rights from the citizens would keep increasing. In empirical literature, there is conflictingevidence regarding this assumption. Desai et al (2009) find that partial political liberalization and welfare spendingtend to be substitutes in non-democratic regimes. They suggest that partial democratization is the flip-side of awaning welfare state (p: 118). As result of this distinction, many scholars (for example, Bueno de Mesquita andDowns, 2005) argue that dictators allow economic rights to be distributed among the citizens while withholding thepolitical freedoms. This process, they argue, allow the regime to sustain without having to democratize. On the

other hand, Marvall (1978) shows that as the anti-Franco movement grew, the issues of strikes increasingly becamemore politically demanding that generally consisted of demands for free and democratic unions and for the right tostrike. The assumption that liberalizing the economies provides a buffer against providing political rights, however,does seem to be popular among dictators since many dictators at least attempt to substitute economic withpolitical rights. International Crisis Group, for example, states that in many countries the focus of democratization ison economic steps as opposed to the more difficult but equally critical social and politicaltransformations(International Crisis Group, 2004, p:11).38

Post-power scenarios are also affected by the outcomes of the previous games and the consequent institutionalstructure of the dictatorship. If the dictator has co-opted major permanent power-holders in the polity at the time ofhis departure, he will have a place to go to and will be able to negotiate a good deal. On the other hand, if the hisopponents have gained bargaining power due to the concessions that the dictator has made over time, then it ismore likely that his exit would be less than pleasant.


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change his dominant strategy. The payoff structures of the one-time game change when thedictator calculates the expected payoff over time.

The continuous concessions make the dictators claim to power that much more fragile byexposing the regimes lack of legitimacy (Dix, 1982). Moreover, providing concessions to thecitizens may lead to an increase in the bargaining power of the citizens against the dictator

for future interactions. Similarly, sometimes concessions in one aspect of bargaining affectthe bargaining power of the opponent in another game. Therefore, continuous concessionsmay lead to a situation where the next concession that is demanded by citizens or groups ofcitizens results in the complete transfer of power. In these circumstances, as dictatorscontinue to concede to the citizens to fulfill their short term objectives, suddenly they findtheir power threatened. At that time, they can either give up power (as we observed in someempirical examples above) or reverse concessions by introducing deliberalizationpolicies(Brumberg, 2002). In other words, Liberalization is an unclenched fist, but the handis the same and at any moment it could be clenched again into a fist (Brzezinski, 1989, p:45-46 quoted in Shin, 1994, p: 142-143).

Musharrafs case in Pakistan is a classic example of this path. He afforded many concessionsnot only to the political elites (for example, through direct rent distribution and by affordingthem limited decision making power through the establishment of the legislature) but also to

more broad based citizen groups including the media and judiciary by allowing them tooperate relatively independently. However, when the judiciary, emboldened by the relativelack of restrictions, demanded his exit from the position of power by threatening to forciblyremove him, he resorted to repressive policies. Nevertheless, the judiciary, media, lawyersand other sections of civil society cooperated to form a movement that resulted inMusharrafs resignation a year after his major crackdown on the judiciary.

Marcos case in the Philippines also shows a similar pattern. In 1970, in order to gain somesemblance of legitimacy and to transform his presidency into an indefinite tenure, Marcoscalled a Constitutional Convention that was aimed at devising mechanisms to reformPhilippine politics, strengthen government accountability to the public, and address long-neglected social justice concerns. The invitation was received very well by the public.However, the consultations that spanned a year showed that many convention participants

favored a parliamentary system coupled with a specific prohibition targeted at Marcos andhis wife against a sitting or former president, or any of his close relatives, holding thegovernments top executive office. Marcos feared that he might be out of office after theend of his second term, with a new president in place by the time the constitution was finallyratified. As a result of this fear, on 23rd September 1972, Marcos declared martial law andindefinitely suspended the countrys two-party system. Marcos jailed hundreds of his critics,including more than a dozen Constitutional Convention delegates. A controlled conventionthen hastily approved new documents ceding to Marcos the combined powers of the newpremiership and the old presidency. Signed by Marcos on November 30, the constitution ofthe Philippines emerging autocracy reversed in two months the reform trajectory of theprior two years (Brownlee, 2007).

However, if the dictator has a long horizon and a low discount rate, he would not set out onthe path of concessions in the first place. A participant whose relative power is expected todiminish if he pursues an appeasement strategy has to make a choice between fighting awar sooner under favorable circumstances when other groups are not powerful enough toseriously challenge him than later when he has lost bargaining power to his opponents as aresult of his own concessions. If the dictator has a longer time horizon and would prefer tostay in power, then repression from the beginning is the dominant strategy of the dictator. Ifthe citizens concede in response to the repressive policies of the regime, it leads to arepressive dictatorship. However, if citizens try to affect changes in the governancestructure from time to time, the dictatorship remains unstable. Iran after 1979 fits the latterpattern. The theocratic regime in Iran has kept itself legitimate without loosening its grip on


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power while the opposition, despite rigorous intermittent protests,39 seems thus farincapable of finding a way to build a broad coalition of forces to oppose the regime (Foran,1997). The tug of war between the civil society and the regime continues. Except underconditions of duress, the leader and Council of Guardians disregard public opinion unlessdetermined protests reinforced them (Brownlee, 2007) and citizens revolt every time thereis an opening to do so. The most recent indication of this war was the broad based dissent in

the form of demonstrations and riots following the Presidential elections in 2009. Thedemonstrators alleged that the election results were rigged in favor of the regime-favoredcandidate. This was the moment, like many other moments in the past, where the regimestructure could have been altered. But the regime did not concede beyond the bareminimum that is required to maintain legitimacy. However, these moments are very likely torecur unless either the regime initiates a massive repressive drive to oust all dissent or thepublic accepts defeat and internalizes the norms of the present institutional structure. Theadamancy of both sides results in revolution and repression which only makes the pie to beshared among different participants smaller.

The above discussion also makes it very clear that in case of a transition to democracy, thestability of the new democratic system critically depends on the bargaining process thatensued before the emergence of democracy. Dictatorial regimes which gradually constructrules, institutions and processes to define the distribution of decision making powers among

different groups in the society transition into stable democracies. For example, the quality ofdemocracy that emerged in Pakistan following the dictatorial rule in 2008 was different fromthe democracy that emerged in 1988. Far from being perfect, nine years of Musharrafsdictatorial regime allowed the judiciary to amass some independence from the executiveand the legislature so that it continues to challenge the present democratic government.40

Similarly, the relative freedom of expression during Musharrafs regime allowed media toflourish and now it is an integral part of the governments accountability system. On theother hand, General Zias eleven year regime was largely repressive and consequently, thedemocratic system that emerged lacked the basic institutional structures required fordemocratic functioning. Transition from Musharrafs rule was a result of the struggle of civilsociety, while Zias regime came to an end due to the death of the dictator. This differenceis reflected in the resulting institutional structure of the democracy. Similarly, the nature andthe quality of the concessions reached during dictatorial regime, the groups who received

these concessions affect the institutional structure of the resulting democratic regime.41 Ifthe primary survival mechanism of the dictatorial regime was the co-optation of strongpolitical groups in the country, then the resulting democratic structure would be patronagebased. On the other hand, if the regime bargains with economic classes to liberalizeeconomy (as we saw in Chile), then the resulting democratic structure would be the onewhere the market is the primary mechanism for the allocation of resources.

4. Conclusion and moving forward

39Council of Guardians effectively controls the decision making in the regime. Yet, presidential elections take place

regularly and spark debates and political dissent by the Councils opposition. Campaigns preceding the 1997Presidential elections showed massive support to Khatami against the regimes favorite Nateq-Noori. In the

elections, record turnout of eight percent brought Khatami into office. Similarly, in parliamentary elections in 2000,public supported the candidates that contested elections on the front that was blatantly against the Council ofGuardians so that they won a sixty five percent majority in the assembly. After the 2000 elections, the advocates ofpopular sovereignty pursued a gradualist strategy, hoping that Khamenei and his associates would voluntarilyaccede to the groundswell of discontent and surrender some of their powers to the elected president andparliament. Reformists electoral victories did little to slow the traditionalists campaign against civil society activesand prodemocracy media. On the contrary, each loss they suffered seemed only to make traditionalists morevicious. Legislative proposals to redistribute power foundered against the unflinching Council of Guardians.40 As the paper is being written, the Supreme Court has ruled that National Reconciliation Order (NRO) is declared

unconstitutional by the Court. NRO provides indemnity to many members of the ruling party against past corruptioncases.41

For more details on Pakistans political history see: Jalal (1995) and Rizvi (2003).


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We presented a framework of strategic interaction between the dictator and citizens (orcoalitions of citizens) that could incorporate free activity purely strategic behavior wherethe action and offer of each participant is affected by what the other participant wouldaccept in an effort to affect the outcome of the game in his favor. The framework allows usto manipulate a number of environmental factors so that we can observe the behavior of theparticipants more closely. It also allows us to generate a variety of behaviors within which

relationships among different variables of interest can be studied. It also identifies a numberof variables that are important in determining the outcome of the dictatorship game.

Our discussion of the generic game suggests that communication systems among players(among the group of citizens and between the dictator and citizens), their reliability and thedegree to which their efficacy can be influenced by either or both players is crucial inshaping the outcome of the game. The other important factor is the existence of potentialdifferences among different groups of citizens that can be exploited by the dictator toimprove his bargaining position vis-a-vis any group of citizens. The strength of thecitizenship relationship that ties the individual to the state reduces the opportunitiesavailable to the dictator to disintegrate his opposition. Similarly, the political landscape inthe country affects the ability of the dictator to co-opt different groups. In a country wherepatronage politics and localization of politics is the norm, the co-optation of the mostinfluential political elements in the society is not only easy but also highly efficient. History is

another factor that affects how much information each participant has about the personalityand value systems of other participants. The personality and value systems of participantsdetermine the credibility of their threats and promises and also reduce the room for theexploitation of hidden information by either of the participants.

Observing one game at a time, however, provides us with only a partial picture. These one-time games have to be accumulated across groups of citizens and over time to present aholistic picture of dictatorial regimes and especially to analyze the possibility of politicaltransitions. Looking at an accumulation of across group games highlights the importance ofthe distribution of resources, the availability of outside resources to the dictator, theprincipal method of the distribution of resources, and the distribution of political powerwhich determine the motivation of the dictator to initiate bargaining with one or anothergroup. These factors also determine the bargaining power of different groups. The groups

that bargain with the dictator, in turn, determine the kind of institutions that are establishedin the dictatorship and the level and distribution of repression in the society. If the civilsociety and media are strong and the dictator requires their collaboration, the resultinginstitutions would be broad based and allow the citizens to participate in the decisionmaking process or hold the government accountable. On the other hand, if the wealth orpolitical power is concentrated in a smaller proportion of the society the institutions that areestablished would tend to represent only those sections. At the same time, in a marketeconomy, most of the concessions will be geared towards middle class and entrepreneurswho are the engine of the economy. The institutions established in dictatorial regimes, inturn, affect the characteristics of the democracy that the dictatorship transitions into.

The distribution of power across groups, on the other hand, is distinct from the increase insuffrage and both are necessary for a transition towards consolidated democracy. Theformer is the result of individual games of different groups of citizens with the dictator while

the latter is possible only when broader groups are able to assert their bargaining position.In other words, the shift of authority is the result of the evolution of games between differentsets of actors and the dictator while the increase in suffrage is the evolution of dictatorsrelationship across groups. We observed that while transition towards democracy ispossible, the route is precarious, uncertain and dependent on a lot of different structuralvariables. The primary message, however, is that a consolidated democracy occurs througha gradual process of negotiation between the dictator and different groups in the societyrather than through a rupture or break down of the authoritarian regimes. Even whendemonstrations and riots by the citizens occur, their aim is usually to effect a small


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constitutional change rather than an overhaul of the governance structure. Authoritarianregimes move towards a democratic system, not by international design but through thegradual accretion of small adjustments in power-sharing pacts. In other words, sustainabledemocracy isnt designed, but rather evolves, and that evolution can very well take placewithin authoritarian regimes. Civil wars and revolutions can certainly create opportunities forconstitutional exchange, but they are unlikely to be necessary or sufficient for change in the

institutional structures. Congletons (2010) analysis of European democracy that spans acentury also suggests that Western democratic structures emerged gradually as long-standing institutions revised a little at a time.

Points of departure for intervention by the international community:

The framework of the dictatorships and political transition that we presented offers anumber of different points of departure for the international community to encourage andpromote the political transitions towards democracy. The first and foremost recognition,however, is that the establishment of a consolidated democracy is an evolutionary process.

Therefore, any effort to encourage democracy should focus on the building blocks andelements of the system that are likely to give rise to a sustainable democratic structure.Some important building blocks are discussed briefly below.

Direct international aid to the dictator can have different effects depending on thecharacteristics of the aid and other structural factors. Aid without conditions on its spendingmay decrease the incentive of the dictator to bargain with the citizens. On the other hand,the aid can be made conditional upon certain actions that a dictatorial regime must take toconcede to other groups that represent citizens (for example, media, independent judiciary)in the society. Another form of political engineering is the strengthening of selected actorswhose enhanced position is deemed to have a democratizing influence on the polity at large.

The increase in the bargaining power these actors possess would not only make the dictatormore willing to negotiate with the citizens but would also bend the outcome of the game infavor of the citizens. Instead of explicit political support to these groups, economic supportthat is directly targeted to these groups can also increase their bargaining position.


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References:

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Albrecht, H. (2007) Authoritarian Opposition and the Politics of Challenge in Egypt inSchulumberger, Oliver (ed.) Debating Arab Authoritarianism: Dynamics and Durability inNondemocratic Regimes, Stanford University Press, Stanford, California

Ben-Porath, E and Dekel, Eddie (1992) Signaling Future Actions and the Potential for Sacrifice

Journal of Economic Theory, Vol. 57, p: 36-51Bertocchi, G and Spagat, M (2001) The Politics of Co-optation Journal of Comparative

Economics, Vol. 29, p: 591-607Zissis, C. and Bhatarjee, P. (2008) Media Censorship in China Council on Foreign Relations,

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Aslam_Dictatorship Paper Feb 2010