The Political Economy of Coffee and Dictatorship
Rwanda under the Habyarimana Regime was populated by smallholders growing coffee for export. This chapter studies the political and economic saliency of the coffee sector for the state budget and the power of the regime, building on Wintrobe’s model of dictatorship. In times of high world market prices the ruler buys loyalty from the peasant producers by offering a high producer price. This policy becomes unsustainable under declining world market prices as a result of which the ruler switches to repression to maintain power.