Dictators and Their Budget: Assessing the Revenue Structure in Two Dictatorships, Power and Rent Maximising Ones

As the dictator needs revenues for both establishing loyalty and applying repression to stay in power, fiscal policies build the heart of dictatorships. This paper analyses the effects of different types of dictators on the shape of the revenue structure by distinguishing between power- and rents-maximizing dictators. Relying on an interaction model with a dictator and its citizens, I show that the revenue structure is influenced by the compliance level. Different revenue categories require alternate degrees of cooperation. The dictator can increase the compliance by providing social welfare spending or abolishing the civil liberties and political rights restrictions. Testing the theoretical predictions, the empirical analysis is based on a new unpublished fiscal Panel dataset for autocracies and time-series-cross section regressions are performed. The findings confirm the alternating reliance of dictatorships on different revenue sources with respect to the type of dictator and to the compliance requirements of the revenue source.