We suggest that insulating leaders from overthrow during their early days in office may have positive economic consequences for dictatorships. During leadership transitions, elites scramble to determine who will replace the departing leader, which can provoke elite conflicts, deepen existing factions, and, ultimately, create an environment of political instability. With elites devoting their attention to the power struggle (instead of attending to economic policy) and foreign investors withdrawing their resources in fear of uncertain markets, the economy may bear the brunt of the political volatility