Media Briefings

Revolution: The Role Of ‘Information Cascades’ In Political Regime Change

  • Published Date: June 2011

The idea of ‘information cascades’, in which people make decisions on the basis of seeing what other people are doing, provides valuable insights into how revolutions happen. For example, it can explain why revolutions are often a considerable surprise to virtually everyone, participants and spectators alike. This is clearly applicable to the unfolding events of the ‘Arab spring’, where there are information cascades both within and between countries, facilitated by new information technologies such as Twitter and Facebook.

Writing in the June 2011 issue of the Economic Journal, Professors Christopher Ellis and John Fender use the idea of information cascades to develop a theory of political regime change brought about by the occurrence or threat of revolution. They illustrate the theory with discussion of a number of historical episodes, including the French and Russian revolutions, the East European revolutions of 1989, the Tiananmen Square massacre in China in 1989 and the events in Burma (Myanmar) in 2007.

The analysis shows why dictatorships may not want to eliminate the risk of revolution entirely since that may involve considerable redistribution. Instead, the elite may prefer to enjoy their perquisites in an unequal society, calculating that it is worth running what they consider to be a very small risk of revolution.

In recent years, economists have put considerable effort into explaining regime changes and revolutions. A common explanation (put forward by Daron Acemoglu and James Robinson) is that dictatorial regimes democratise because of a threat of revolution by workers.

According to their analysis, the ruling elite may wish to redistribute income to workers to avert a revolution. But a mere promise to redistribute may not be credible since the regime could renege on its promise when the revolutionary threat has subsided. Democratisation is a way for rulers to may make the promise to redistribute credible.

This theory arguably explains a great many democratisations, but there are some loose ends. For example, how do workers coordinate their actions? It is here that the new study makes a contribution.

A key component of the theory is the notion of an information cascade, where people make decisions by observing what other people do. So if some people rebel, others may follow, thinking that their rebellion may be a sign of the regime’s weakness.

According to the analysis in this study, workers decide whether or not to rebel by observing other workers’ behaviour, as well as by observing any ‘signals’ that they may receive about the state of the regime. If enough of them rebel, there is a successful revolution and the rulers are overthrown.

Rulers anticipate the possibility that workers may rebel, and may react in various ways. They may seek to redistribute income or perhaps democratise. Of particular relevance is the ‘quality of information’ – information flows are crucial to the occurrence of revolutions. This is consistent with the behaviour of many autocratic regimes, which seek to prevent the gathering and dissemination of information.

A number of results emerge from the analysis. One is that rebellions need not always succeed, and sometimes revolutions can be a mistake in the sense that everyone is worse off after they occur. Another is that a highly unequal society, where a tiny fraction of the population enjoys a huge fraction of its wealth, is particularly susceptible to revolution.

ENDS

Notes for editors: ‘Information Cascades and Revolutionary Regimes Transitions’ by Christopher Ellis and John Fender is published in the June 2011 issue of the Economic Journal.

Christopher Ellis is at the University of Oregon. John Fender is at the University of Birmingham.

For further information: contact John Fender on 0121 414 6644 (email: J.Fender@bham.ac.uk); or Romesh Vaitilingam on +44-7768-661095 (email: romesh@vaitilingam.com).