Policy change and coups: The role of income inequality and asset specificity
| Date | 01 September 2015 |
| DOI | 10.1177/0192512113518568 |
| Author | Sawa Omori,Taeko Hiroi |
| Published date | 01 September 2015 |
| Subject Matter | Articles |
International Political Science Review
2015, Vol. 36(4) 441 –456
© The Author(s) 2014
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DOI: 10.1177/0192512113518568
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Policy change and coups: The role
of income inequality and asset
specificity
Taeko Hiroi
The University of Texas at El Paso, USA
Sawa Omori
International Christian University, Japan
Abstract
Building on the models developed by Boix, Acemoglu, and Robinson on the relationship between economic
structures and regime change, we develop a theory that emphasises structural characteristics of societies
and the effects of policy change in such circumstances. We posit that significant policy change in an unequal
or asset-specific society induces coups against the incumbent political leader by the losing faction of the
elites seeking to prevent or cut losses associated with the policy shifts. Our empirical analysis indicates that
the risk of a coup rises considerably during a period of a significant policy change in a society with a skewed
distribution of income and one dominated by asset-specific production, such as oil, mining, and agriculture.
Keywords
Coup, regime change, inequality, fixed assets, political instability, event history analysis
Introduction
Despite the remarkable wave of democratisation that hit many corners of the world in the late
twentieth century, coups remain one of the key sources of government instability in much of the
developing world. What explains the timing and causes of coups? We define a coup as a seizure of
executive power by the use or threat of force by some segment of the political elites. Many prior
studies have identified structural conditions, such as poverty, economic structure, social mobilisa-
tion, political pluralism, and previous coup experiences, as root causes of coups (Belkin and
Schofer, 2003; Huntington, 1968; Jackman, 1978; Londregan and Poole, 1990; O’Kane, 1993;
Stone, 2004). Others have examined organisational and personal grievances and ambitions of the
Corresponding author:
Taeko Hiroi, Department of Political Science, The University of Texas at El Paso, 500 W. University Avenue, El Paso,
TX 79968, USA.
Email: thiroi@utep.edu
518568IPS0010.1177/0192512113518568International Political Science ReviewHiroi and Omori
research-article2014
Article
442 International Political Science Review 36(4)
military and its officers, regime legitimacy, international conditions and short-term economic fluc-
tuations as factors influencing the susceptibility of a country to coups ( Belkin and Schofer, 2003;
Bueno de Mesquita et al., 1992; Genna and Hiroi, 2007; Hiroi and Omori, 2013; Huntington, 1957;
Luttwak, 1969; Svolick, 2012: Thyne, 2010; Thompson, 1980).
Our study contributes to this body of literature by providing a new empirical theory of coups
that incorporates both short-term triggers and long-term structural risks, thereby generating an
explanation about not only why coups occur but also when they are likely to be attempted. Building
on and extending the models developed by Boix (2003) and Acemoglu and Robinson (2006) on the
relationship between economic structures and regime change, we argue that coups are most likely
to occur during the periods of significant policy change, or expectation thereof, in highly unequal
societies and in societies whose central economic activities are in the specific asset sectors.1 A
major policy change in a highly unequal and/or specific asset society precipitates a coup because
the elites’ stakes in policy are high. The high cost of policy shifts motivates the losing faction of
the elites to attempt to overthrow the incumbent to forestall or reverse the change.
We model coups as repeatable events and use an event history analysis to examine their onsets
on a cross-section of 146 countries from 1960 to 2007. Our analysis indicates that the risk that a
coup will be attempted rises considerably during a period of significant policy change in a society
with a skewed income distribution and one dominated by specific asset production.
This article is organised as follows. The next two sections present a theory of coups that empha-
sises the motivational factors arising from a society’s structural characteristics. We then discuss
variables, data, and methodology. Following the presentation of our data analysis, we examine the
implications of our theory for coup traps.
Policy change in an unequal society
A coup is carried out by a small but critical segment of the insiders of power and is a risky opera-
tion for the perpetrators. It is risky because failed coup conspirators are typically executed, jailed
or otherwise forced into exile and, by its nature, conspirators cannot rely on the explicit support of
the masses even when latent support may exist for the removal of incumbent political leaders. Why
would the members of the elites undertake such a risky operation? Conversely, granted that in any
regime there are individuals with political ambitions or grievances against the current leadership,
why don’t we observe more coups? While previous studies have focused on permissive precondi-
tions, our approach emphasises the interaction between structural preconditions and policy shifts
that motivate negatively affected elites to oust the incumbent political leaders.
Our approach begins by assuming that in all societies some people are better off than others,
which generates varying degrees of conflict. Compared to more homogeneous, equal societies,
polarised societies raise the margin of conflict of interests over the status quo versus possible pol-
icy change, because the difference in one’s welfare when one is on the winning side and when one
is not can be substantial for the latter. The sources of societal polarisation may lie in ethnic, class
or other divisions; however, much of the grievances and interests is usually tied to economic inter-
ests – more specifically, differential distributions of income among groups.2
A significant policy change in such a society can be destabilising because its costs to the losers
are very high. In the literature on regime change, inequality is shown to hinder democratisation
because of its redistributional costs to the elite. For example, Boix (2003) and Acemoglu and
Robinson (2006) argue that because of the redistributional consequences of regime choice, with
democracy being pro-majority and thus more redistributive than autocracy, democratisation occurs
when the cost of redistribution to the elite diminishes and that of repression increases.3 Thus,
extreme inequality between groups exacerbates the conflict of interests, raising the stakes for the
ruling elites to maintain the status quo and others to pursue reforms.
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