Autocratic regimes can use carrots and/or sticks to ensure that they are not overthrown by their opposition in the population. Carrots, i.e. allocation of resources, increase the popularity of the regime, but can induce moral hazard if the opposition learns that protesting is rewarded. Sticks, i.e. repression, decrease the likelihood that protests are successful, but decrease popularity. This paper looks at the joint allocation of resources and repression by considering the case of residential construction and military presence in former East Germany after an Uprising in 1953. Using a difference-in-differences approach, I show that after 1953 both construction and military presence increased in protest compared to non-protest municipalities. This result cannot be explained by pre-existing differences, need for construction, or external warfare considerations. I examine the timing of construction and show that construction in municipalities increases after military units are assigned to them, indicating that the regime deliberately used carrots to alleviate the negative effect of sticks on popularity. Last, I study support for the regime after its demise in 1990. I find that the decrease in support was smaller in areas that received more construction and higher in areas with more military units. This paper thus provides empirical evidence that targeting the opposition with both carrots and sticks can be an effective strategy for autocratic regimes.

Link to paper: sites.google.com/view/cathrinmohr/jmp