The Dictator’s Handbook - by Bruce Bueno de Mesquita, Alastair Smith

The Dictator’s Handbook - by Bruce Bueno de Mesquita, Alastair Smith

Read: 2024-05-16

Recommend: 10/10

Learning about societies from the dictator’s perspective—specifically the distinction between small-coalition (autocracy) and large-coalition (democracy) societies—is truly enlightening. It sheds light on many controversial and counterproductive actions taken by governments.

Notes

Here are some text that I highlighted in the book:

1. And our notion of governing for political survival tells us that there are five basic rules leaders can use to succeed in any system:  

   • Rule 1: Keep your winning coalition as small as possible.  
   • Rule 2: Keep your nominal selectorate as large as possible. Maintain a large selectorate of interchangeables and you can easily replace any troublemakers in your coalition, influentials and essentials alike.  
   • Rule 3: Control the flow of revenue. It’s always better for a ruler to determine who eats than it is to have a larger pie from which the people can feed themselves. The most effective cash flow for leaders is one that makes lots of people poor and redistributes money to keep select people—their supporters—wealthy.  
   • Rule 4: Pay your key supporters just enough to keep them loyal. Remember, your backers would rather be you than be dependent on you. Your big advantage over them is that you know where the money is and they don’t. Give your coalition just enough so that they don’t shop around for someone to replace you and not a penny more.  
   • Rule 5: Don’t take money out of your supporter’s pockets to make the people’s lives better. Effective policy for the masses doesn’t necessarily produce loyalty among essentials, and it’s darn expensive to boot. Hungry people are not likely to have the energy to overthrow you, so don’t worry about them. Disappointed coalition members, in contrast, can defect, leaving you in deep trouble.

2. There can simultaneously be many different groups trying to organize to overthrow a regime and each might have sufficient numbers of lukewarm or double-dealing supporters who could aid them in securing power—or just as easily aid someone else, if the price is right. This is why it is absolutely essential to seize the reins of power quickly to make sure that your group gets to control the instruments of the state, and not someone else’s.

3. The czar could not pay them enough because he foolishly cut the income from one of his major sources of revenue, the vodka tax, at the same time that he fought World War I. Czar Nicholas confused what might seem like good public policy with bad political decision making. He had the silly idea that a sober army would prove more effective than an army that was falling-over drunk. Nicholas, it seems, thought that a ban on vodka would improve the performance of Russia’s troops in World War I. He missed the obvious downsides, however. Vodka was vastly popular with the general populace and, most assuredly, with the troops. So popular and widely consumed was vodka that its sale provided about a third of the government’s revenue. With vodka banned, his revenue diminished sharply. His expenses, in contrast, kept on rising due to the costs of the war.

4. Silence, as Ben Bella learned far too late, truly is golden. There is never a point in showing your hand before you have to; that is just a way to ensure giving the game away.

5. Research into CEO longevity teaches us, not surprisingly, that time in office lengthens as one maintains close personal ties to members of the board. Just as sons and daughters may make attractive inheritors of the mantle of power in a dictatorship, friends, relatives, and fellow employees can generate the expectation of more loyal supporters after power is achieved.

6. This is the essential lesson of politics: in the end ruling is the objective, not ruling well.

7. The three most important characteristics of a coalition are: (1) Loyalty; (2) Loyalty; (3) Loyalty. Successful leaders surround themselves with trusted friends and family, and rid themselves of any ambitious supporters.

8. those who can bring a leader to power can also bring the leader down. It is best to shrink the ranks of those who represent a threat and keep those who are most trusted to be loyal.

9. What we can begin to appreciate is that no matter how well a tyrant builds his coalitions, it is important to keep the coalition itself off-balance. Familiarity breeds contempt. As noted, the best way to stay in power is to keep the coalition small and, crucially, to make sure that everyone in it knows that there are plenty of replacements for them. This is why you will often read about regular elections in tyrannical states. Everyone knows that these elections don’t count, and yet people go along with them. Rigged elections are not about picking leaders. They are not about gaining legitimacy. How can an election be legitimate when its outcome is known before the vote even occurs? Rigged elections are a warning to powerful politicians that they are expendable if they deviate from the leader’s desired path.

10. Ruling is about staying in power, not about good governance. To this end, leaders buy support by rewarding their essential backers relative to others. Taxation plays a dual role in generating this kind of loyalty. First it provides leaders with the resources to enrich their most essential supporters. Second, it reduces the welfare of those outside of the coalition. Taxation, especially in small-coalition settings, redistributes from those outside the coalition (the poor) to those inside the coalition (the rich). Small coalition systems amply demonstrate this principle, for these are places where people are rich precisely because they are in the winning coalition, and others are poor because they are not.

11. The resource curse enables autocrats to massively reward their supporters and accumulate enormous wealth. This drives prices to the stratospheric heights seen in Luanda, where wealthy expatriates and lucky coalition members can have foie gras flown in from France every day. Yet to make sure the people cannot coordinate, rebel, and take control of the state, leaders endeavor to keep those outside the coalition poor, ignorant, and unorganized. It is ironic that while oil revenues provide the resources to fix societal problems, it creates political incentives to make them far worse.

12. Having filled government coffers, leaders spend resources in three ways. First they provide public goods. That is, policies that benefit all. Second, they deliver private rewards to their coalition members. This mix of private and public benefits differs across political systems, and it’s worth noting that any resources left over after paying off the coalition are discretionary. Leaders therefore have a third choice to make about spending money. They could spend discretionary money promoting their pet projects. Alternatively, and all too commonly, as we shall see, they can hide them in a rainy-day fund.

13. The most reliable means to a good life for ordinary people remains the presence of institutional incentives in the form of dependence on a big coalition that compels power-seeking politicians to govern for the people. Democracy, especially with little or no organized bloc voting, aligns incentives such that politicians can best serve their own self-interest, especially their interest in staying in office, by promoting the welfare of a large proportion of the people. That, we believe, is why most democracies are prosperous, stable, and secure places to live.

14. in small-coalition regimes, bailouts all too often are the means to preserve business as usual. Economic bailouts in autocracies rarely precipitate a serious review of economic or business policies. They are almost never accompanied by regulatory reform. Consequently, economic crises happen more often than in democracies and, so long as rich nations feel an urge to provide loans, debt forgiveness, or aid, rarely result in betterment for the society although they do result in security for lousy leaders.

15. Indeed, a common refrain among small-coalition rulers is that the very freedoms, like free speech, free press, and especially freedom of assembly, that promote welfare-improving government policies are luxuries to be doled out only after prosperity is achieved and not before. This seems to be the self-serving claim of leaders who keep their people poor and oppressed. The People’s Republic of China is the poster boy for this view. When Deng Xiaoping introduced economic liberalization to China in the 1980s, experts in wealthy Western countries contended that now China’s economy would grow and the growth would lead to rapid democratization. Today, more than thirty years into sustained rapid growth we still await these anticipated political reforms. Growth does not guarantee political improvement but neither does it preclude it. The Republic of China (aka Taiwan) and the Republic of Korea (aka South Korea) are models of building prosperity ahead of democracy. Needless to say, the People’s Republic of China certainly is not fond of promoting either of those countries’ experiences.

16. A far better measure of leaders’ interest in education is the distribution of top universities. With the sole exceptions of China and Singapore, no nondemocratic country has even one university rated among the world’s top 200. Despite its size, and not counting universities in Hong Kong, which were established under British rule before Hong Kong’s return to China in 1997, the best-ranked Chinese university is only in 47th place despite China’s opportunity to draw top minds from its vast population. The highest ranking Russian university, with Russia’s long history of dictatorship, is 210th. By contrast, countries with relatively few people but with dependence on many essential backers, like Israel, Finland, Norway, the Netherlands, Belgium, and Canada, have several universities ranked among the top 200. That this uneven distribution of top-notch universities favors large-coalition locales is no accident.

17. We shouldn’t fail to notice that universities in their own right constitute small-coalition political systems with a pretty big batch of interchangeables. No surprise, then, that they behave like autocracies, favoring the rich and connected at the expense of those who lack political clout. If you doubt it, have a look one day at how many administrators university presidents like to hire compared to faculty. It seems you can never have too many supporting-cast administrators whose jobs depend on keeping the person at the top happy. Faculty, on the other hand, don’t depend on keeping their “bosses” happy; they depend on keeping their colleagues happy long enough to get tenure and then they are pretty free to do whatever they want—why do you think we can write this passage! There is a delicate balance to be struck, to be sure, and so successful university leaders are especially skilled at doling out private rewards to anyone who could be a threat. People who raise money for the university frequently get a percentage of what they bring in to incentivize them. Faculty who are cooperative are likely to more readily be granted sabbaticals, get research funds, pick the classes (usually small) that they teach, and so forth. So we shouldn’t be surprised by distortions in merit in universities; they really are small-coalition regimes.

18. We don’t need to appeal to civic spirit to explain why people have so much better a life in a democracy than in an autocracy. Higher levels of education are accessible to everyone when the coalition is large; education is basic when the coalition is small. Health care is for those who are productive when the coalition is small; babies and the elderly are not excluded from health care when the coalition is large. Good water is for everyone when the coalition is large; otherwise, it is only for the privileged. And most importantly, freedom to say what you want and to dissent when you don’t get it is abundant when the coalition is large, and is scarce in the extreme when the coalition is small.

19. Though private rewards can be provided directly out of the government’s treasury, the easiest way to compensate the police for their loyalty—including their willingness to oppress their fellow citizens—is to give them free rein to be corrupt. Pay them so little that they can’t help but realize it is not only acceptable but necessary for them to be corrupt. Then they will be doubly beholden to the regime: first, they will be grateful for the wealth the regime lets them accumulate; second, they will understand that if they waver in loyalty, they are at risk of losing their privileges and being prosecuted. Remember Mikhail Khodorkovsky? He used to be the richest man in Russia. We do not know whether he was corrupt or not, but we do know that he was not loyal to the Putin government and duly found himself prosecuted for corruption.

20. Most people think that reducing corruption is a desirable goal. One common approach is to pass additional legislation and increase sentences for corruption. Unfortunately such approaches are counterproductive. When a system is structured around corruption, everyone who matters, leaders and backers alike, are tarred by that corruption. They would not be where they were if they had not had their hand in the till at some point. Increasing sentences simply provides leaders with an additional tool with which to enforce discipline. It is all too common for reformers and whistle-blowers to be prosecuted for one reason or another. It is rumored that Yasser Arafat kept a record of all the corrupt activities of the cabinet members in his government in the Palestinian Authority. Increasing the punishment for corruption only increases the leverage people like Arafat and others have over their cronies. Arafat effectively induced loyalty to him both by allowing and monitoring crony-corruption within his inner circle. And, while claiming that the Palestinian Authority was bankrupt, he allegedly personally socked away a vast fortune, between $4.2 billion and $6.5 billion, according to Al-Jazeera.

21. Legal approaches to eliminating corruption won’t ever work, and can often make the situation worse. The best way to deal with corruption is to change the underlying incentives. As coalition size increases, corruption becomes a thing of the past. As we proposed for the IOC and FIFA, increasing the number of members responsible for choosing the site of the games could end graft.

22. The fact is, aid does a little bit of good in the world and vastly more harm. Unless and until it is restructured, aid will continue to be a force for evil with negative consequences—moreover it will continue to be promoted by well-meaning citizens who in making themselves feel good are blinded to the harm they are inflicting on many poor people who deserve a better lot in life.

23. democrats act as if they care about the welfare of their people because they need their support. They are not helping out of the goodness of their hearts, and their concern extends only as far as their own people—the ones from whom they need a lot of supporters. Democrats cannot greatly enrich their essential backers by handing out cash. There are simply too many people who need rewarding. Democrats need to deliver the public policies their coalition wants. Autocrats, on the other hand, can richly reward their limited number of essential backers by disbursing cash.

24. Yet it is hard to reconcile the large scale of aid flows to Egypt and Pakistan with idealistic goals. If aid actually helped the poor, then we might expect the people in recipient nations to be grateful and hold donor nations in esteem. Nothing could be further from the truth. In return for its “benevolence” to Egypt and Pakistan, the United States is widely reviled by the people in those two countries; and with good reason.

25. People in nations receiving lots of US aid seem to hate the United States.

26. Example after example highlight the simple fact that aid is given in exchange for policy concessions far more readily and in far larger quantities than to reduce poverty and suffering.

27. A UNSC seat gives leaders valuable favors to sell in the form of their vote on the Security Council, and the aid they receive results in worse performance for their economy.

28. Membership on the UNSC gives national leaders a say in formulating global policy. Many leaders, particularly those from autocratic nations, appear to prefer to sell this influence rather than exercise it on behalf of their people’s interests.

29. UNSC membership comes as close to a randomized test as we are likely to get. Although who gets elected is not random, it is unrelated to the need for aid.

30. The historical record shows that aid has largely failed to lift nations out of poverty. It is perhaps ironic that while aid affords the resources to alleviate poverty and promote economic growth, it creates the political incentives to do just the opposite. As Edward Walker, US ambassador to Egypt (1994–1998) succinctly put it, “Aid offers an easy way out for Egypt to avoid reform.”

31. Democrats prefer compliant foreign regimes to democratic ones. Democratic interventionists, while proclaiming to be using military force to pursue democratization, have a profound tendency to reduce the degree of democracy in their targets, while increasing policy compliance by easily purchased autocrats.

32. Noble words from both Mao Zedong and Jomo Kenyatta. Neither fulfilled his promises of equality, democracy, and liberty for the average Chinese or the average Kenyan. Nor did either leader eliminate corruption and special opportunities for their party faithful. Once most revolutionaries come to power, their inclination—if they can get away with it—is to be petty dictators. After all, the democratic institutions that engender the policies the people want also make it hard for leaders to survive in office. Leaders won’t acquiesce to the people’s wants unless the people can compel them.

33. Today Russia is backsliding away from democratization. While under Boris Yeltsin’s post-Gorbachev government Russia maintained free and competitive elections, that is much less true today. Vladimir Putin, former head of the Soviet secret police (the KGB) and Yeltsin’s immediate successor, moved the political system sharply back from its emerging dependence on a large coalition and good governance. He made it much more difficult for opposition parties to compete by severely restricting freedom of assembly. He made it much more difficult for opposition candidates to get their message across by nationalizing television and much of the print media. He made it much more difficult for people to articulate their dissatisfaction by making it a crime to make public arguments that disparaged the government. In short, he systematically reduced the availability of freedoms that compel a democratic government to attend to the wishes of the people. Why could he do this? As we have noted, Russia is awash in oil wealth. During Putin’s time, unlike poor Gorbachev’s, oil prices were at record highs so he could pay key backers to help him quash opposition, and possibly even have enough extra money from oil to keep the people happy enough that they don’t rebel against their loss of freedom.

34. Revolutionary moments often arise, as we saw in the cases of Ghana, South Africa, and the Soviet Union, when an economy is near collapse—so near, in fact, that the leadership can no longer buy the military’s loyalty. Such circumstances are practically inevitable in the life of the vast majority of autocracies. Their rent-seeking, corrupt, inefficient economic ways assure it.

35. The Packers are the only nonprofit, community-owned franchise in American major league professional sports. Their 112,120 shareholders are mainly local fans. The ownership rules preclude a small clique taking control of the team. No one is allowed to own more than 200,000 shares in the Packers and there are about 4.75 million shares outstanding. Thus, a tiny band of owners cannot easily overturn the many and run the team for their personal gain at the expense of the larger, small-owners fan base. The Packers have a forty-three-member board of directors.

36. Many will conclude that it is cruel and insensitive to cut way back on foreign aid. They will tell us that all the money spent on aid is worth it if just one child is helped. They will forget to ask how many children are condemned to die of neglect because, in the process of helping a few, aid props up leaders who look after the people only after they have looked after themselves and their essential backers, if at all.