In a forthcoming article in Comparative Political Studies, we argue that among the tools autocratic regimes use for this are welfare policies, offering benefits both to important regime collaborators and to potential threats. We use a new, global data set on social policies to test our hypotheses on what autocratic welfare states should look like, and how they work in practice. By examining old-age pensions, we find that autocracies are no less likely to introduce or have such programs than democracies. But autocracies’ pension programs are offered to fewer social groups — and offering these pensions does in fact keep autocratic regimes in power longer.
The Saudi Arabian monarchy illustrates these general patterns quite well. In 2011, just after the Arab Spring’s social upheaval roiled the region, the regime increased public spending on, for instance, health care, education and social services — apparently to calm dissent and avoid a revolution. But autocrats are not concerned only about revolutions. They also fear grievances and dissent among their core supporters — and may use targeted welfare policies to avoid coups. In 2014, Saudi Arabia introduced unemployment insurance with benefits targeted only to key groups. The groups covered included private-sector employees and some public-sector employees. Conspicuously, those who did not get such benefits were workers less likely to threaten the regime, such as agricultural workers, fishermen, household workers, family laborers and foreign nationals. In doing so, Saudi Arabia built on an earlier pension system that basically covered — and excluded — the same groups.
Wait, how can welfare policies help keep autocracies in power?
In democracies, welfare policies often are considered key examples of redistributive policies that benefit the many in the lower and middle classes at the cost of a few wealthy people. Democratic politicians have strong incentives to introduce such welfare schemes to attract voters. But autocrats are not up for competitive reelection; why should they introduce welfare programs?
In autocracies, welfare programs serve a quite different function from redistribution to the poor, and throughout history many nondemocratic regimes have offered welfare programs. For instance, under Chancellor Otto von Bismarck, imperial Germany put in programs such as accident protection in 1884, sickness insurance in 1883 and old-age pensions in 1889.
To take a comprehensive look at characteristics of welfare policies in autocracies and democracies around the world, we drew on several historical sources, including legislative studies published by the ILO and reports by the Labor Department. We constructed an extensive data set on major, nationwide transfer programs covering six social policy areas, 154 countries, and the years 1882—2010.
We found that autocracies are no less likely than democracies to introduce, or have, pension programs, but that these programs cover fewer social groups than in democracies.
Formalized pension programs help autocrats credibly commit to funneling resources — not just at the time but also into the future — to relatively powerful social groups that might otherwise threaten their hold on power. Unlike, say, irregular cash handouts, pension programs make promises of future payments relatively reliable. They have large costs sunk into building program administration and infrastructure, and offer a schedule of payments transparently coming at regular intervals. The powerful groups that the dictator needs support from — whether those are army officers or industrial workers — have good reason to refrain from supporting revolts or coups against a regime that guarantees a big pension check once they retire.
But do pension programs actually help autocrats stay in power?
The answer, in short, appears to be yes. We used our new data to check whether pension programs do make autocratic regimes more durable. We used different statistical models to assess the possible effects, taking into account that old-age pensions are not introduced at random. Our statistical models suggest a positive effect on regime survival. For instance, one of our models suggests that the Chinese regime in the year 2000 had about a 2 percent chance of breaking down — a probability that, according to the model, would have been above 10 percent without a Chinese pension system.
To be sure, these predictions are very uncertain. But our results do suggest that implementing targeted pension programs helps keep autocrats in power for longer.
So why might the Saudi monarchy be distributing largesse in the form of welfare programs such as pensions to a very select class of workers? Because, like other autocrats, they’re hoping to stay in power by pacifying key groups. And these measures indeed seem to work as intended.