In this 2001 AER, Acemoglu and Robinson propose a simple theoretical model of coups and revolutions meant to explain the economic aspects of political transition and consolidation. The basic tradeoff is straightforward: in a democracy, the proletariat must set taxes such that they do not encourage an elite to overthrow the democratic leader in order to escape onerous taxes, and in a dictatorship, the elite must provide sufficient transfers to the proletariat that they do not begin a revolution. Coups are uncommon because a coup leads to a one-time downward shock to the economy. Revolutions are uncommon because they in turn lead to temporary lower output, and because the elite can coopt revolutions by extending the democratic franchise, which de facto allows commitment to higher transfers to the poor in the future by shifting the median voter.
More extensively, the model is as follows. There are two classes of fixed…
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Utopia, you are standing in it! 
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