A Dynamic Game of Reputation and Economic Performances in Nondemocratic Regimes

This paper presents a dynamic game to analyze how reputational effects may explain differences in economic performances of nondemocratic regimes. A good reputation convinces citizens that the dictator will exert high effort in economic performance. With replacement, a dictator exerts high effort only if its foregone rent is not too large. Without replacement, the dictator succeeds in convincing the citizens of its competence but may go “bad” subsequently. If a nondemocracy allows for electoral competition, voters can stop supporting a party and impose a high significant cost at the polls after any reduction in beliefs in the ability of the government to deliver high governance effort. Copyright Springer Science+Business Media, LLC 2012