Abstract

We develop a relational theory of autocracy that sheds light on both the concentration of power and elite competence in authoritarian regimes. Our theoretical framework is a dynamic agency model in which the agent in one period can attempt to become the ruler in the next, capturing the ever-present threat of military and palace coups in autocracies. Under this assumption of “contestable control rights,” the ruler’s decision to recruit an agent of observed competence is endogenous to the anticipated cost of deterring a coup. Three key principles emerge from our analysis: 1) Incompetent rulers earning high “natural rents” from office rule alone. 2) Autocrats generally choose right-hand men who are neither too competent nor too incompetent. 3) More competent rulers are willing to recruit more competent agents.