Carrots and Sticks: Targeting the Opposition in an Autocratic Regime.

Autocratic regimes can use carrots or sticks to ensure that they are not overthrown by their opposition in the population. Carrots, i.e. allocation of resources, increase popularity of the regime, but can induce moral hazard if the opposition learns that protesting leads to receiving more carrots. Sticks, i.e. repression, decrease the likelihood that protests are successful, but decrease popularity. This paper looks at the joint allocation of resources and repression by considering the case of residential construction and military presence in former East Germany after an Uprising in 1953. Using a difference-in-differences approach, I show that after 1953 construction and military presence increased in protest compared to non-protest municipalities. This cannot be explained by pre-existing differences, need for construction, or external warfare considerations. Construction also increases in municipalities after military units are assigned to them, indicating that the regime deliberately used carrots to alleviate the negative effect of sticks on popularity. The decrease in support of the regime after its demise in 1990 is smaller in areas that received more construction and higher in areas with more military units. This paper thus provides empirical evidence that autocratic regimes can target their opposition with carrots and sticks.

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