A theory of military dictatorships

Daron Acemoglu Davide Ticchi Andrea Vindigni

16 June 2008

Encouraging democracy is one goal of most industrialised nations’ foreign economic

policies. Formulating such policies requires an understanding of the political-economy
logic governing democratic transitions. This column describes an important recent
advance in theoretical thinking on the military’s role.

Throughout history, the military has been concerned with much more than national
defense. In Imperial Rome, for instance, by the era of the mid Empire it had become
customary for the military to influence the selection of the new Emperor. In modern
times, virtually all Latin American and African nations have seen military interventions,
often culminating in military coups and the emergence of military dictatorships. There
are also instances of military involvement in domestic politics, even in apparently
consolidated democracies. In 1958, the democratically-elected French government was
forced to back down in a confrontation with a unified military command.
While, economists have been studying the political logic of transitions to and from
democracy (e.g. Wintrobe 1998 and Dixit 2006), the military’s role has been largely
ignored. Our recent work, A Theory of Military Dictatorships, takes a first step towards a
systematic framework for the analysis of the role of the military in domestic politics. Our
objective is to ultimately understand what types of nondemocratic regimes can survive
with the support of the military, which regimes will generate interventions from the
military, and why the military may align itself with some segments of the society against
others.
Our basic analytic framework is simple. Two groups, the elite rich and the citizens, are in
conflict under democratic and nondemocratic regimes. Under democracy, redistributive
policies benefit the citizens at the expense of the rich. Under oligarchy the rich keep their
wealth but have to create (and pay) a repressive military to maintain them in power. A
repressive military is a double-edged sword, however; once created, it has the option of
attempting to establish a military dictatorship, seizing power from democratic or
oligarchic governments. This is the political moral hazard problem at the core of our
framework.
The framework helps us think about the military’s relationship with oligarchies,
specifically the conditions under which the military will act as a perfect agent of the elite
in oligarchies, and the conditions under which the military will turn against the elite and
attempt to set up its own dictatorship.
The framework also clarifies thinking on the military’s role in transitions to democracy.
The key element concerns the credibility of future pay-offs. Since oligarchies need a
repressive military in ways that democracies do not, the oligarch’s commitment to future
pay-offs is credible while those of a democratic government may not be. Consequently,
our framework suggests that military coups are more likely to take place against
democracies than against oligarchies because of the inability of democratic regimes to
commit to not reforming the military in the future. Nevertheless, military coups against
oligarchies are also possible when the political moral hazard problem is sufficiently
severe. The point turns on the assumption that there is a probability that coups against
oligarchies will fail.
This perspective also suggests that military coups may be more likely when the external
role of the military is more limited. When a strong military is needed for national
defense, democratic regimes can also commit to keeping a relatively large military, thus
reducing the incentive for military takeover at the early stages of democracy.
This framework also predicts that the historical relations between nondemocratic regimes
and the military are important for the consolidation of democracy once this regime
emerges. If a powerful military has been created by the elite to prevent democratization,
then this military will be present at the early stages of the nascent democracy. However,
since democracy does not have as much of a need for coercion as the nondemocratic
regime, the military anticipates future reforms by the democratic government to reduce
its size and power. This anticipation induces the military to take action against nascent
democratic regimes, unless credible commitments for the continued role of the military in
politics or other significant concessions can be made.
Other factors that are highlighted as important by our framework include the extent of
income inequality and abundance of natural resources. Greater inequality increases the
conflict between the elite and the citizens and encourages oligarchic regimes to maintain
power by using stronger militaries. This increases both the risk of military intervention
during the oligarchic regime and also once democracy emerges. Natural resources further
increase the political stakes and make it more difficult to prevent the political moral
hazard problem because the military can exploit natural resources once it comes to
power. As such, they often make military interventions more likely.
Conclusions
One of the important implications of this general research program is that, when trying to
shape or influence transitions to democracy, it is important that policy makers consider
the complexities of the three-way interactions between the elite, the military and citizens.
Our theory is a step towards a systematic framework for the analysis of the role of the
military in domestic politics and will hopefully spur more theoretical and empirical
research to understand the factors that facilitate the emergence and persistence of
democratic regimes.

A Theory of Military Dictatorships

Daron Acemoglu, Davide Ticchi, Andrea Vindigni
NBER Working Paper No. 13915*
Issued in April 2008
NBER Program(s): EFG POL
We investigate how nondemocratic regimes use the military and how this can lead to the
emergence of military dictatorships. Nondemocratic regimes need the use of force in
order to remain in power, but this creates a political moral hazard problem; a strong
military may not simply work as an agent of the elite but may turn against them in order
to create a regime more in line with their own objectives. The political moral hazard
problem increases the cost of using repression in nondemocratic regimes and in
particular, necessitates high wages and policy concessions to the military. When these
concessions are not sufficient, the military can take action against a nondemocratic
regime in order to create its own dictatorship. A more important consequence of the
presence of a strong military is that once transition to democracy takes place, the military
poses a coup threat against the nascent democratic regime until it is reformed. The
anticipation that the military will be reformed in the future acts as an additional
motivation for the military to undertake coups against democratic governments. We
show that greater inequality makes the use of the military in nondemocratic regimes
more likely and also makes it more difficult for democracies to prevent military coups. In
addition, greater inequality also makes it more likely that nondemocratic regimes are
unable to solve the political moral hazard problem and thus creates another channel for
the emergence of military dictatorships. We also show that greater natural resource rents
make military coups against democracies more likely, but have ambiguous effects on the
political equilibrium in nondemocracies (because with abundant natural resources,
repression becomes more valuable to the elite, but also more expensive to maintain
because of the more severe political moral hazard that natural resources induce). Finally,
we discuss how the national defense role of the military interacts with its involvement in
domestic politics.

In operational form, the key difference between a democracy and a dictatorship is choice
or self indulgence. A dictator, despot and sometimes an oligarch has ABSOLUTE rule
over the nation state. The laws that govern the rights of the people, the economy and
private property fall under despotic rule in a dictatorship. Not necessarily the ideal
environment.
In a democracy, the citizens have choice to create laws and to maintain private property.
Self-indulgence allows for the people to choose what is best for them rather than having
some one else tell them what is best for them. With the option to choose, where laws, the
economy and personal liberties develop from there are up to the people. In a free society
of choice, they tend to evolve into a social contract, creating a majority rule. (This
explanation is regarding to what democracy is at its base and not the common conception
of democracy, and probably the one used in this topic is that of the United State's model
of democracy, which would obviously differ in comparison at a developed stage.)
Speaking to minority groups and how there is always someone unhappy about something
regardless of which political system you live in. In a dictatorship you are sentenced to be
unhappy with it the rest of your life. In a democracy you have the ability to try and make
a change.
Speaking to efficiency. Dictatorships may be more efficient, but efficient at what?
Efficient in passing new laws persecuting and oppressing certain groups, or efficient in
raising taxes? Yes there could be efficiency in new tax breaks or other policies, as most
anything has some positive effects. Yes there is efficiency in a dictatorship, but at what
expense? There is a huge sacrifice in freedom and personal liberties in a dictatorship that
I will never be willing to forgo in the name of efficiency or anything else short of the
security of other personal freedoms.