The recent revival of authoritarianism and worldwide losses in democratic quality merit a reassessment of current theories of regime consolidation and change. In this dissertation, I provide four interlinked theories of authoritarian consolidation, authoritarian replacement, democratization and democratic erosion. First, I argue that dictators consolidate power after crises by expanding the ruling coalition and using formal institutions as signaling devices. Doing so weakens the coordination capacity of the plotters and reduces the likelihood of a coup. I take a political economy perspective in the remaining chapters, showing first that authoritarian turnover increases when wealth levels in the elite are low. This generates incentives for elite groups to control the state to capture rents. However, as wealth increases, elites become concerned with protecting their wealth instead of fighting each other over state rents. Democracy ensues as it provides a system of rule of law that guarantees property rights. Lastly, I provide a theory of democratic erosion based on the notion of a productivity gap between economic sectors: democracy's equilibrium breaks down when low productivity sectors seek to control the state and extract rents over reinvesting in more productive enterprises. This productivity imbalance creates the space for a `Caesarian' leader to emerge. To probe these theories, I use a mixed methods approach that includes formal modeling, various quantitative techniques and case studies of the Dominican Republic, the United States and Spain.