Many, if not most, dictatorships end up with a series of disastrous decisions such as Hitler’s attack on the Soviet Union or Hirohito’s government launching a war against the United States in 1941 or Saddam Hussein’s aggression against Kuwait in 1991. Even if a certain policy choice is not ultimately fatal for the regime, such as Mao’s Big Leap Forward or the Pol Pot’s collectivization drive, they typically involve both a miscalculation by the leader and an institutional environment in which better-informed subordinates have no chance to prevent the decision from being implemented. We offer a dynamic model of non-democratic politics, in which repression and bad decision-making are self-reinforcing. Repressions reduce the immediate threat to the regime, yet raise future stakes for the dictator; with higher stakes, the dictator puts more emphasis on loyalty than competence, which in turn increases the probability of a wrong policy choice. Our theory offers an explanation of how rational, calculating dictators end up in an informational bubble even in highly institutionalized authoritarian regimes.

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