On Dictatorship, Economic Development and Stability

6 Conclusion

Everyone agrees that dictatorship is a political regime violating human rights. However,
its effect on economic performance remains heatedly debated in the absence of clear-
cut empirical results. The poorest countries are indeed dictatorships but the spectacular
economic growth of the East-Asian countries in the last half a century occurred under dic-
tatorial rule. The causes of its stability and instability are even more poorly understood.
Without this knowledge, how to explain the wave of democratization that happened in the
last two decades in numerous parts across the world simultaneously? Will this historical
shift be durable?

To answer these questions, it is necessary to focus the research on the dynamics of dicta-
torship. The objective of this paper is to propose a framework to account for the observed
large variance of economic performance under dictatorship and its political stability.

In a simple growth model, we formalize the intertemporal behavior of a dictator illustrat-
ing Olson’s idea that a dictator has an ’encompassing interest’ in the fate of the economy
he rules. As a result, the economic performance depends a lot on the dictator’s impatience
rate. It turns out that all the dictator’s preferences represented by a CIES utility function
are economically feasible and, for each type of preference, the dynamics of the economy
possesses a locally stable steady state. In this framework, there is no economic limit to
the dictator’s preferences.

The maintenance in power of a dictator does not rely on its popularity but on the reduc-
tion of the risks to be deposed. The threat of a popular insurrection or a plot by a group

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