have already seen such conflict in the decade before the discovery. This result could be due to our prediction that a dictator who has used violence in the past, is more likely to use violence again in the future to avoid retribution for his past misdeeds. Finally, Wright (2008) reports how dictators with shorter “time horizons” (for example because they face a revolutionary threat) are more likely to abuse aid income as a means to stay in power.

The idea that the availability of divertible funds contributes to the derailment of dictators, also lines up well with anecdotal evidence available for many of the aforementioned examples. As discussed in the Appendix, Kwame Nkrumah’s Ghanaian government was well-funded in the mid-1950s via the revenues generated from the duties on cocoa-exports. Comparable conditions have been documented for the Philippines, Libya, and Romania. Marcos’ regime in the Philippines benefitted in the early 1970s from a fourfold increase in the price of copra (the country’s main export product), while Libya and Romania saw its leaders (Gaddafi and Ceausescu) derail in the 1970s, when their governments were well-endowed after having profited from increases in the oil price (with Libya being an oil producer and Romania managing to generate “hard currency” during the oil crisis by exporting refined petroleum products; cf. Roper (2000: 55)). Similarly, it has been reported that Mugabe’s government uses revenues generated by the exploitation of diamond fields for repressive purposes (giving rise to so-called “blood diamonds”, see Human Rights Watch (2009)).

An analogous pattern can be observed around fungible resources stemming from development aid: Alberto Fujimori’s self-coup (which signaled the beginning of his repressive days) took place less than a year after Peru had received a low-interest rate IMF-loan (Hudson, 1993: 174), while Robert Mugabe’s behavior first deteriorated during the 1980s - a decade in which his government was well-funded thanks to large aid inflows.<sup>29</sup> These aid inflows were meant to reward Mugabe for his benevolent behavior. Paradoxically, our model however implies that through this reward-system, Mugabe’s promising start may actually have contributed to his subsequent derailment (also see Meredith (2009: 81) who recounts how Mugabe abused aid donations for purposes of repression).

At the same time, Daniel arap Moi’s rule of Kenya became less repressive after the US reduced their aid flows to Moi’s regime once it had become of less strategic interest following the collapse of the USSR.<sup>30</sup> This suggests that policies aimed at limiting the amount of fungible resources available to a non-accountable ruler can be useful. The reason is

> 29From 1979 to 1984, foreign aid to Zimbabwe increased by a factor 32 (measured in 2011 dollars, it went from 26 to 849 million dollars according to World Bank data). Over the same five year period, aid to neighboring and similarly-populated Angola only doubled (it went from 120 to 285 million dollars).

> 30According to World Bank data, aid to Kenya fell from 2 billion dollars in 1989 to 442 million in 1999 (all measured in 2011 dollars) - a reduction of more than 75 percent.

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