We propose a model where an autocrat rules over an ethnically divided society. The dictator carefully selects the tax rate over the subjects' production and the nation's natural resources to maximize his rent under the threat of a revolution. We show that it may be in the interest of a weak...

In weak institutional settings, autocrats barter political and economic concessions for support to remain in power and extract rents. Instead of viewing the favors’ beneficiaries, i.e. the elites, as an exogenous entity, we allow the king to decide whom to coopt provided the subjects are...