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

The paper is organized follows. Section I introduces the notions of political labor
market and promotion contract in hierarchies as a mechanism of political-economic exchange
between the ruling bureaucracy and the population. A formal model of an implicit contract
between the rent-maximizing bureaucracy and the career-seeking activists is developed in
Section II. This section also analyzes the characteristics of the equilibrium in the political
labor market and establishes the limits of a regime’s sustainability. Section III discusses the
institutional framework of the Soviet political labor market and describes the data that can be
used to estimate the effects of various economic parameters on the activist recruitment. The
test of the proposed model using the panel data from former Soviet republics is presented in
Section IV. Section V concludes.

I. Political-economic exchange in a hierarchy

The most important feature of many, if not most, non-democratic regimes, overlooked
by the existing literature, is that the rulers are not single dictators or isolated cliques but rather
top segments of complex hierarchies. There is constant turnover within the ruling strata. A
‘median dictator’ can hardly keep hold on power for more than a decade, although famous
examples of longevity, such as Joseph Stalin in the USSR or Joseph Tito in Yugoslavia, might
have created misperceptions on that part. A non-democratic regime, dictatorial or oligarchic,
is a political - and often also an economic - monopoly, but paradoxically it creates no
impassable barriers to entry to the ruling stratum on the personal level. This feature creates
the possibility to raise support in a way that is consistent with the rationality of political-

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