Compensating Autocratic Elites: How International Demands for Economic Liberalization Can Lead to More Repressive Dictatorships

How does international pressure for economic liberalization affect repression in autocracies? I argue that demands for deregulation create a "compensation dynamic" that can lead to repression. Autocrats can liberalize to build goodwill with the international community, but liberalization also threatens the interests of domestic autocratic elites. Liberalization undercuts the networks of patronage and clientelism that empower elites. Thus, liberalizing the economy could weaken political insiders, potentially destabilizing the regime coalition. Insider elites look to counteract this threat by demanding that autocratic rulers commit to protecting the status quo. Dictators are likely to accede and increase repression to placate allies and avoid a potential coup. Crucially, this compensation dynamic only occurs when dictators see rebellion as a potential danger to their tenure. When elites are unable to coordinate a credible threat, dictators can heed international interests without having to compensate regime insiders. In contrast, statistical analyses of a global sample of autocracies show that economic liberalization is associated with repression when elites are strong enough to check dictators' power.