The Dictator's Handbook: Why Bad Behavior is Almost Always Good Politics

by Bruce Bueno de Mesquita

In a democracy, or any other system where a leader’s critical coalition is excessively large, it becomes too costly to buy loyalty through private rewards. The money has to be spread too thinly. So more democratic types of governments, dependent as they are on large coalitions, tend to emphasize spending to create effective public policies that improve general welfare pretty much as suggested by James Madison. By contrast, dictators, monarchs, military junta leaders, and most CEOs all rely on a smaller set of essentials. As intimated by Machiavelli, it is more efficient for them to govern by spending a chunk of revenue to buy the loyalty of their coalition through private benefits, even though these benefits come at the expense of the larger taxpaying public or millions of small shareholders.

The Russian Revolution is often portrayed through the prism of Marxist ideology and class warfare. The reality might be much simpler. Kerensky’s revolutionaries were able to storm the Winter Palace in February 1917 because the army did not stop them. And the army did not bother to stop them because the czar did not pay them enough. 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.

Following a gun battle that killed all of Doe’s entourage, Prince Johnson captured the president and videotaped his subsequent interrogation. The interrogators repeated the same questions over and over again before Johnson turned to cutting off Doe’s ear and eating it:

Sometimes, of course, having competent advisers is unavoidable. Byzantine, Mughal, Chinese, Caliphate, and other emperors devised a creative solution that guaranteed that these advisers didn’t become rivals: They all relied on eunuchs at various times.

Liberia had been ruled by the True Whig Party. The country originated when a number of American liberal organizations, appalled by the evils of slavery, paid to repatriate former slaves to West Africa. Despite the nation’s philanthropic origins, the most important lesson the former slaves took from their experiences appears to be that slavery and forced labor worked much better for the masters than the slaves. These former slaves instituted universal adult suffrage in 1904, but with a property qualification that effectively excluded indigenous Africans from becoming insiders, making the selectorate large but the influential group relatively small.

Thus we hold stock via mutual funds and pensions (there are tax and management reasons to do so too, but then think about who has the incentive to lobby for these regulations). These institutional investors, like village elders, are influential enough that CEOs court their support. But it is much cheaper to buy the loyalty of the institutional investor by private goods, such as fees for board membership, than it is to reward all the little investors he represents with great stock performance.

The HIPC program has received much criticism for its slow pace in reducing the debt of poor nations. Our criticism of HIPC is the opposite. These programs are actually too eager to forgive debt. Debt forgiveness simply allows autocratic leaders to start borrowing more money. As we’ll see a little later, financial crises are one of the important reasons leaders are compelled to democratize. Debt reduction, however, relieves financial pressure and enables autocrats to stay in office without reform, continuing to make the lives of their subjects miserable.

The world’s 36 governments that depend on the largest groups of essentials have thirty-one fewer infant deaths per 1,000 births than the forty-four governments that depend on the smallest groups of essentials. Comparing the same eighty countries but now based on per capita income, the poorest have fifteen more infant deaths per 1,000 births than the richest. Being rich does facilitate saving babies’ lives but not as much as being democratic!

Looking within approximately equal per capita income slices of the world, however, those regimes that depend on a big coalition on average make quality drinking water readily accessible to almost their entire population, and those who depend on a smaller coalition lag behind by 20 percent or more. The availability and technology of clean water doesn’t favor democratic societies; democratic regimes favor ensuring that drinking water is clean.

serious estimate of the Caliphate’s income for the years 918–919 is 15.5 million dinars, 10.5 million of which was spent on the Caliphs household.

the United States gave Pakistan $6.6 billion in military aid to combat the Taliban between 2001 and 2008. Only $500 million is estimated to have ever reached the army.

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

Before giving to a charity many people like to assess how much of their donation goes to help people versus how much is spent on overhead. Oxfam America, for instance, gets three out of four stars from Charity Navigator, an organization that rates charities. Oxfam spends 6 percent of its revenue on administrative expenses and 14 percent on fundraising. The remaining 80 percent is spent on programs, that is, helping people. Unfortunately, 80 cents on the dollar is not the effective amount of help provided. Remember those trucks and the 300 percent import duty—if such cases are the norm (and they usually are) the actual aid benefit may only equate to 20 cents on the dollar. If even as careful a charity as Oxfam is being shaken down, then it makes us wonder what is happening to the rest.

autocrats are skilled at exploiting the international community. By letting more people die they may in fact be able to extract more relief assistance.

The official exchange rate is 6 kyaks to the dollar. However, the real rate is around two hundred times higher. This means the regime can deposit all gas export earnings in government accounts at the official exchange rate and still keep 99.5 percent of the money for themselves.

A few of history’s revolutionaries stand out for their success not only in overthrowing a nasty regime, but in creating a people-friendly government in its place. America’s George Washington, South Africa’s Nelson Mandela, India’s Jawaharlal Nehru, and the Philippines’ Corazon Aquino are a few cases in point.

All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.

As an Ethiopian general put it, “when you lose an area you better destroy your equipment—it’s a principle of war. If you cannot separate your men from their equipment then you bomb them both together.”

as the coalition continues to expand, a wedge is eventually driven between what a king wants and what his court needs. When that wedge gets big enough we have an explanation for the emergence of a mature democracy that is so stable it will almost certainly remain democratic and not backslide into autocratic rule. The switch in the coalition’s desires for institutional change results from tradeoffs between declines in private goods as the coalition expands, and the increase in public goods and societal productivity that accompanies such enlargement.

FIGURE 10.1 The Welfare of Essentials and of Ordinary Citizens