Scandinavian Working Papers in Economics

Working Paper Series,
Stockholm School of Economics, China Economic Research Center

No 2012-23: Citizenry Accountability in Autocracies: The Political Economy of Good Governance in China

Mario Gilli () and Yuan Li ()
Additional contact information
Mario Gilli: Department of Economics, University of Milan-Bicocca
Yuan Li: China Economic Research Center, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden

Abstract: Do citizens have a role in constraining the policies of autocratic governments? Usually political and economic literature models autocracy as if citizens have no role in constraining a leader's behavior, when in fact autocratic governments are afraid of potential citizen revolts. In this paper we build a three player political agency model to study citizenry accountability in autocracies. We show that the citizens can effectively discipline the leader due to the threat of revolution notwithstanding the size of the selectorate, though this may result in a failed state when the costs of revolution and the size of the selectorate are small. Our model and results provide a useful framework for interpreting the political logic of the China's economic reform after the "Tiananmen incident".

Keywords: Autocracy; Accountability; Revolt; Chinese Economic Reform

JEL-codes: D02; D74; H11; P30

39 pages, September 20, 2012

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