Digitized by the Internet Archive in 2011 with Funding from Democratization or Repression?

Regimes controlled by a rich elite often collapse and make way for democracy amidst widespread social unrest. Such regime changes are often followed by redistribution to the poor at the expense of the former elite. We argue that the reason why the elite may have to resort to full-scale democratization, despite its apparent costs to themselves, may be that lesser concessions would be viewed as a sign a weakness and spur further unrest and more radical demands. The elite may therefore be forced to choose between repression and the most generous concession, a transition to full democracy. *Wc thank Philippe Aghion for useful comments and help with the presentation, tDepartment of Economics, Massachusetts Institute of Technology, email: [email protected] tDcpartmcnt of Political Science, University of California, Berkeley and Hoover Institute, Stanford University, email: [email protected] "Men must be either crushed or pampered" Machiavelli, Niccolo (1961, p. 8).