Decentralization in Autocraties

Emmanuelle Auriol and Anais Dahmani

No 20058, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In a model featuring two regions — one affluent and the other impoverished — the allocation of public spending is examined under an initially centralized and autocratic political process. In a stable autocracy, the decision to implement decentralization reforms hinges on a tradeoff: while centralization enables the autocrat to extract higher rents, it also results in reduced productivity in the poor region. The autocrat opts for decentralization when the negative impact on productivity outweighs the benefits of rent extraction. Moreover, under the pressure of democratic movements and growing instability, an authoritarian regime may also pursue decentralization reforms to preserve its wealth from the decisions of the poor median voter.

Keywords: Autocracy; Decentralization; Democratization (search for similar items in EconPapers)
JEL-codes: D02 D72 D74 O57 P48 (search for similar items in EconPapers)
Date: 2025-03
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