Article thumbnail

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

By Valery Lazarev


This paper analyzes the economic foundations of a non-democratic political regime, where the ruling bureaucracy captures rents through collective control over state property and job assignment. The model developed here yields the equilibrium in the "political labor market," where the ruling bureaucracy buys services and political support of activists recruited from the working population. The underlying implicit contract requires that the incumbent bureaucrats retire after a certain time to allow for deferred promotion of activists into rent-paying positions. The major implications are that the stability of a non-democratic regime is consistent with high-income gap between the rulers and the rest of the population, strengthened when government pursues an active investment policy, and is not directly affected by public goods provision or the rate of economic growth. The results of econometric analysis of panel data from former Soviet states for the period of 1956-1968 confirm the predictions of the model.non-democratic regimes, bureaucracy, hierarchy, political support, promotion incentives, implicit contract, Soviet Union

OAI identifier:

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.

Suggested articles


  1. [Working class of the USSR in 1966-70.] 1979. Nauka, Moskva RGASPI: Russian State Archive of Socio-Political Information.
  2. (1971). Ezhegodnik BSE [Great Soviet Encyclopedia; Annual Appendices],
  3. (1991). From Revolutionary Cadres to Party Technocrats in Socialist China.
  4. (2000). Job Assignment and Promotion.”
  5. Ky-hyang.1991.“Economic Growth, Technical Change Biases, and the Elasticity of Substitution: a Test of the De La Grandville Hypothesis.”
  6. (1984). Nomenklatura: the Soviet Ruling Class.
  7. (2003). Political Economy of Stalinism.
  8. (2001). Political Economy of the Soviet Regime and Its Post-communist Transformation.”
  9. (1981). Rank-Order Tournaments as Optimum Labor Contracts.”
  10. (1996). The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force.”
  11. (1980). The Power to Tax: Analytical Foundations of a Fiscal Constitution.
  12. (1999). The Provision of Incentives in
  13. (1987). The Soviet Economy: Problems and Prospects,
  14. (2000). Why Did the West Extend the Franchise?
  15. (1998). Why Join the Party in a One-party System?: Popularity versus