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Pá 31.10.2014

T. Willems (Oxford) “What shall we do with the bad dictator? Time-consistency in the presence of strategic agents”

Tim Willems, Ph.D.

Nuffield College, University of Oxford, United Kingdom

Authors: Shaun Larcom, Mare Sarr, and Tim Willems

Abstract: Recently, the international community has increased its commitment to prosecute malevolent dictators by establishing the International Criminal Court, thereby raising its loss of being time-inconsistent (granting amnesties ex post). This deters dictators from committing war crimes ex ante. Simultaneously, however, such commitment selects dictators of a worse type. Moreover, when a dictator behaves so badly that the costs of keeping him in place are considered to be greater than those of being time-inconsistent, the international community will still grant amnesty. Consequently, increased commitment to ex-post punishment may actually induce dictators to worsen their behavior, purely to "unlock" the amnesty option and force the international community into time-inconsistency. This leads to a general lesson: when regulators lack a perfect commitment technology, it is dangerous for them to try to commit as that may invoke a strategic response from regulatees which worsens the original problem.

JEL-classification: F55, K14, O12

Key words: Dictatorship, Time-consistency, International Criminal Court, Amnesty, Institutions

Full Text:  “What shall we do with the bad dictator? Time-consistency in the presence of strategic agents”