DICTATORSHIP, DEMOCRACY, AND DEVELOPMENT

Under anarchy, uncoordinated competitive theft by ''roving bandits'' d estroys the incentive to invest and produce, leaving little for either the population or the bandits. Both can be better off if a bandit set s himself up as a dictator-a ''stationary bandit'' who monopolizes and rationalizes theft in the form of taxes. A secure autocrat has an enc ompassing interest in his domain that leads him to provide a peaceful order and other public goods that increase productivity. Whenever an a utocrat expects a brief tenure, it pays him to confiscate those assets whose tax yield over his tenure is less than their total value. This incentive plus the inherent uncertainty of succession in dictatorships imply that autocracies will rarely have good economic performance for more than a generation. The conditions necessary for a lasting democr acy are the same necessary for the security of property and contract r ights that generates economic growth.