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A RATIONAL CHOICE EXPLANATION FOR STALIN'S “GREAT TERROR”
Author(s) -
LSKAVYAN VAHE
Publication year - 2007
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.2007.00311.x
Subject(s) - incentive , principal (computer security) , plaintiff , economics , simple (philosophy) , rational agent , mathematical economics , law and economics , political science , law , microeconomics , computer security , computer science , neoclassical economics , philosophy , epistemology
There is no agreement about the reasons for Stalin's Great Terror of 1937–1939. This paper argues that the problem faced by Stalin was similar to the standard principal–agent problem: the country was run as one enormous firm with Stalin as the only residual claimant. The monetary incentive structure was inadequate and the threat of mass shirking by the agents was real. A simple model of a principal with two agents is developed to address the problem. Assuming that the agents can observe and can reveal each other's shirking, it is shown that, under some assumptions, an equilibrium exists with the following strategy profiles: unless someone's shirking is revealed, the principal is committed to randomly punishing one of the agents with positive probability; an individual agent never shirks and always reveals a co‐worker's shirking. A case study of the period is used to check the plausibility of this hypothesis.