Political Rents, Promotion Incentives, and Support for a Non-Democratic Regime

An additional stationarity constraint to their problem results from the necessity to balance the
inflow of promoted activists and retiring bosses:

(8)          πNa = Nb-.

T_b

To simplify further analysis, let us combine the two constraints, by plugging (8) into (4) and
rearranging the terms:

(9)             Na =[*N, ∆R (1 - e - ^rTb )/T„ ∣∙,

where ∆R = R - W is the boss premium. Hereafter, the combined constraint (9) is referred to
as the feasible supply of activists.

The representative boss’s problem is then:

Tb

(10)           max ∫ f (N_a)e^-rtdt

^Tb 0

subject to (9).

The bosses’ objective function (7) can be characterized by the lines of equal levels of
residual life-time rents in the (Tb, Na) plane - isorents. The optimal solution to the problem
(10) - an equilibrium in the regime’s political labor market - is attained at the point of
tangency of an isorent and the feasible supply curve in the (Tb, Na) plane that corresponds to
constraint (9). Replacing the left-hand side of (7) with an arbitrary constant, integrating the
expression, taking logs, and rearranging term obtains an algebraic expression for the isorent:

rC

(11) N = f ^-11—^-

a_-

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