The Political Economy of Post- Communist Autocracy: The Continuum Between Dictatorship and Democracy

The article deals with the economic behaviour of a hypothetical political leader in the institutionally underdeveloped democratic environment of a transitional society. By using Stigler-Peltzman’s model of economic regulation, it has been shown that there is no optimal solution for an autocratic leader. In the long run, wealth transfer to political supporters alone is not sufficient for the autocrat to stay in power. That’s why such regimes are generally unstable, and will ultimately be either overthrown or transformed into ‘hard’ dictatorships. The marginal costs of regime protection and opposition, crucial for the political behaviour of conflicted social groups, can be considered as political turning points responsible for sudden and unexpected social changes.