Under certain conditions both the opponents and supporters of an authoritarian regime can benefit from the peaceful liberalization of the regime. The literature on transitions to democracy emphasizes the role of negotiated deals (pacts) in facilitating transitions. Political deals are not legally enforceable contracts; they are subject to opportunism by one of the parties. I examine how punishment of the ex-ruler(s) by a successor government after power has been transferred renders a pact ineffective and prevents a peaceful transition. Political asylum can alleviate the punishment dilemma, but the host nation can have an incentive to renege on its protection. A military government retains the power to reintervene in politics after transferring power to civilians. The possibility of reintervention allows the military to ensure compliance by other parties and overcome the punishment dilemma.
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