The below thoughts are based on Stephen Haber’s book about authoritarian government and Prof. Richard Wong’s lecture today.
Because a dictator must depend on a launching group to help him seize power, he is faced with the threat that these people might take over his place after he becomes the autocrat. Therefore he must find a way to either compromise with the launching group or to curb their power. There are three methods:
1. Terrorize leadership to curb the launching organization. Although this seems to be secure for the autocrat by creating an atmosphere of distrust between bureaucrats, it also poses other threats such as secret police and deficient governance. Ultimately the dictator will be unconstrained. Property rights will by no means be protected, and the economy is unlikely to grow fast.
2. Co-optation between the dictator and the launching organization. This is more stable since the dictator creates an equilibrium between bureaucracy, private investors (often included in the 3-party arrangement), and himself by allocating rents.
It is worth noting that the Chinese history has examples for the two methods above. Emperors among the Ming dynasty intensively used the secret police to tighten their control over the bureaucrats and thus created a terror. In the Tang dynasty, however, some emperors cooperated closely with the different administration departments and made for high economic growth.
3. Organizational proliferation. The logic is to raise the costs of collective action between the different layers of the launching group.