TY - JOUR
T1 - Foreign Direct Investment and Authoritarian Stability
AU - Bak, Daehee
AU - Moon, Chungshik
N1 - Publisher Copyright:
© 2016, © The Author(s) 2016.
PY - 2016/12/1
Y1 - 2016/12/1
N2 - This article examines how foreign direct investment (FDI) affects the likelihood of authoritarian leaders’ political survival. We argue that FDI reduces the likelihood of experiencing political challenges from elites. We present two mechanisms for this claim. First, the host governments of authoritarian regimes can use FDI for long-term private good provision, so that FDI helps them to appease elite dissents and to buy off potential elite challengers. Second, FDI mitigates a commitment problem between elites and authoritarian leadership by creating an FDI-related distributional coalition, which in turn makes political defections costly to both parties. Our empirical tests using various two-stage estimators show that FDI significantly decreases the likelihood of elite-driven authoritarian leadership failure and coup attempt.
AB - This article examines how foreign direct investment (FDI) affects the likelihood of authoritarian leaders’ political survival. We argue that FDI reduces the likelihood of experiencing political challenges from elites. We present two mechanisms for this claim. First, the host governments of authoritarian regimes can use FDI for long-term private good provision, so that FDI helps them to appease elite dissents and to buy off potential elite challengers. Second, FDI mitigates a commitment problem between elites and authoritarian leadership by creating an FDI-related distributional coalition, which in turn makes political defections costly to both parties. Our empirical tests using various two-stage estimators show that FDI significantly decreases the likelihood of elite-driven authoritarian leadership failure and coup attempt.
KW - autocracy
KW - coup
KW - elite defection
KW - foreign direct investment
KW - leadership stability
UR - http://www.scopus.com/inward/record.url?scp=84993660541&partnerID=8YFLogxK
U2 - 10.1177/0010414016655536
DO - 10.1177/0010414016655536
M3 - Article
AN - SCOPUS:84993660541
SN - 0010-4140
VL - 49
SP - 1998
EP - 2037
JO - Comparative Political Studies
JF - Comparative Political Studies
IS - 14
ER -