Abstract
The central question discussed here is why some long-lasting autocratic economies experience growth whereas some others experience stagnation. To deal with this question, a mini-series of repeated prisoners' dilemma games in an open economy is developed. It involves the autocrat, the bureaucrats, and the citizens. The interactions among these three types of players and the external environment which the autocracy faces determine the outcome of the economy. It is argued that with stronger external competition for subjects and land, an autocrat would allow for better compensation and more secured tenure for his bureaucrats. This improves bureaucratic efficiency by promoting productive cooperation between bureaucrats and citizens, thus leading to better economic performance. A comparative study between the Song (960-1279) and the Ming (1368-1644) dynasties in China's history shows that the model's implications are consistent with historical facts.