The Peaceful Transfer of Power and Social Contract

Concentrating the legitimate use of organized violence, and entrusting its use to a single individual, is generally considered to be a critical ingredient of state formation, and a necessary ingredient of political stability, especially in fractionalized political environments. Historically, this has been accomplished by appointing a ruler: an individual who is endowed with—or takes—political authority. The formation of the state relies on simultaneously solving two key security problems. The first is a horizontal security problem, typically associated with Hobbes, where individuals who possess an incentive to predate their fellow citizens must be effectively constrained. The second, commonly associated with Locke, is a vertical security problem, detailing whether private citizens can protect themselves from predation by their ruler. The transition of political power must ultimately confront this dual security problem.

Almost every society that has dealt with the dual security problem has been forced to confront a key challenge: how to motivate a ruler to relinquish power who has broken her compact with society, undermining the political order she was tasked with protecting. Historically, the details surrounding the transition of political power are highly specific, and often bewilderingly complex. But abstracting from the historical details can illuminate some consistent mechanisms across cases, and can help guide the peaceful transition of political power. The most important factor determining a peaceful transfer of power is that an incumbent leader, who is contemplating how intensely to hold onto political power, is motivated by her anticipation of the downstream consequences of relinquishing power, including potentially facing prosecution and transitional justice.

I argue that the peaceful transition of power can—and should—be thought of as an incentive design problem. Specifically, the relevant question is how can political institutions be setup to provision a ruler’s incentive to relinquish power when necessary? Addressing this incentive design problem requires analyzing the incentives of political rulers, while including a role for political instability and transitional justice, requires considering the conceptual foundations of the state, with particular emphasis on ruler turnover.

I focus on a self-enforcing social contract and build on the model of political sovereignty in Tyson (2020), focusing on conceptual consequences that arise from the formulation of the social contract. In my theory, individuals interact over time, and in each period can produce economic goods for consumption. Each citizen also has the opportunity to take another citizen’s economic goods, representing a predatory threat between members of society. This implies that in the absence of some kind of enforcement mechanism, predatory incentives ineluctably lead some citizens to plunder others, constituting a failure of horizontal security absent political institutions. The motivation to appoint the ruler (in the model) is precisely to prevent citizens from pillaging each other. This creates the vertical security problem: how does a ruler tasked with policing predation curb her own desire to predate fellow citizens?

To address the incentive issues arising from the vertical security problem I consider how individuals can hold the ruler accountable through the threat of replacement. My primary contribution is to derive and study the the sovereignty constraint, which is derived from the ruler’s incentive to relinquish power. I show that the ruler’s unique political position implies that her consent is essentially required for executive power to peacefully change hands. Another important implication being that when the sovereignty constraint does not hold, the ruler does not consent to participate in her own removal, and as a consequence, the enforcement mechanisms needed to avoid the horizontal and vertical security problems fail, and political order collapses.

The key strategic dilemma that underlies the sovereignty constraint, which follows from the ruler’s unique role as the sole wielder of legitimate violence, and highlights two things that I show are necessary ingredients of political order. First, the threat of rebellion is important because it prevents the ruler from enjoying her own economic goods if she engages in predation. Second, if the ruler illegitimately clings to power, the most economically productive members of society must engage in economic subversion by reducing economic production, either through capital flight (e.g., moving assets), letting resources remain idle (e.g., leaving crops uncultivated), or resource destruction (e.g., burning oil fields). These two levers—rebellion and economic subversion—follow directly from the sovereignty constraint, and identify a fundamental tradeoff between economic efficiency and political order. Importantly, this tradeoff arises from the political incentives inherent in the strategic foundations of the social contract.

I conclude by applying the sovereignty constraint to transitional justice, i.e. the procedures meant to bring accountability to former government officials. I show that the sovereignty constraint reflects two concerns related to transitional justice. First, by lowering the ruler’s payoff if she relinquishes power, transitional justice can make political order more attractive for a ruler, thus potentially deterring things like human rights abuses—this is the deterrent effect. The second, strategic effect, is where the anticipation of transitional justice, if severe enough, curbs the ruler’s ardor to relinquish power after she defects from the social contract— she instead clings to power. Political stability requires balancing these two effects since failure of either undermines political order by making a ruler’s consent to her own removal more difficult to secure. In particular, overly punitive transitional justice policies can be counterproductive and lead to a breakdown of political order. The results I present suggest that a country’s transitional government may need to credibly convey, and commit to, a willingness not to pursue punitive policies, through things like institutionalized forgiveness measures, such as formal pardons, amnesties, or even giving deposed leaders passage to resplendent retirement homes on the Riviera.