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

by Bruce Bueno de Mesquita

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.

Debt forgiveness with the promise of subsequent democratization never works. An autocrat might be sincere in his willingness to have meaningful elections in return for funds. Yet once the financial crisis is over and the leader can borrow to pay off the coalition, any promised election will be a sham. For democrats, debt relief, while helpful, is unnecessary.

AT LAST, A NEW RULER HAS SHAKEN UP THE COALITION that first brought him to power and he has the right supporters in place. Money is coming in thanks to the taxes being levied. Now comes the real task of governing: allocating money to keep the coalition happy—but not too happy—and providing just enough to keep the interchangeables from rising up in revolt.

Hobbes was only half right. It is true, as Hobbes’s believed, that happy, well-cared-for people are unlikely to revolt. China’s prolonged economic growth seems to have verified that belief (at least for now). Keep them fat and happy and the masses are unlikely to rise up against you. It seems equally true, however, that sick, starving, ignorant people are also unlikely to revolt. All seems quiet among North Korea’s masses, who deify their Dear Leader as the sole source of whatever meager, life-sustaining resources they have. Who makes revolution?

Therefore, a prudent leader balances resources between keeping the coalition content and the people just fit enough to produce the wealth needed to enrich the essentials and the incumbent.

Leaders who depend on a large coalition have to work hard to make sure that their citizens’ lives are not solitary, nasty, poor, brutish, and short. That doesn’t mean democratic rulers have to be civic minded, nor would they need to harbor warm and cuddly feelings for their citizens. All they need is to ensure that there are ample public benefits to provide a high quality of life.

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.

Many distinguished economists, even quite a few with the Nobel Prize under their belts, are convinced that the best way to promote democracy is by promoting prosperity. That is why whenever they see an economic crisis looming on the horizon, such as a government so indebted that it is on the verge of default and bankruptcy, they call for debt forgiveness, new loans, lots of foreign aid, and other economic fixes. They resist the cry of people like us who demand improved governance before any bailout money is offered up to rescue a troubled autocratic economy.

Just like debt forgiveness, a bailout in the face of economic stress for autocrats is a way to solve an impending political crisis. When their economy becomes too feeble to provide sufficient money to buy political loyalty, autocrats face being overthrown either by a rival or a revolution. This, in a nutshell, is the story of the politico-economic crises faced by places like Tunisia and Egypt in 2011.

Are dictators and economists right that economic solvency needs to come ahead of political change? Is becoming materially rich the precursor for the luxury of democracy? We think not. There are plenty of well-to-do places that nevertheless suffer under oppressive governments that keep ordinary peoples’ lives as solitary, nasty, poor, brutish, and short as their neighbors in poorer nations. Take a look at just about any nondemocratic oil-rich or diamond-studded regime.

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.

Leaders who spend on public welfare at the expense of their essentials are courting disaster.

These leaders, whether dictators or democrats, are all grappling with the same question: How much education is the right amount? For those who rely on few essential backers the answer is straightforward. Educational opportunity should not be so extensive as to equip ordinary folks, the interchangeables, to question government authority.

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.

The highest ranking Russian university, with Russia’s long history of dictatorship, is 210th.

Highly educated people are a potential threat to autocrats, and so autocrats make sure to limit educational opportunity. Autocrats want workers to have basic labor skills like literacy, and they want their own children—their most likely successors—to be truly well educated, and so send them off to schools in places like Switzerland, where Kim Jong Un, Kim Jong Il’s youngest son and designated successor, was educated.

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.

So we shouldn’t be surprised by distortions in merit in universities; they really are small-coalition regimes.

The incentives to provide good health care are not so different from the incentives to provide basic education. Keeping the labor force humming is the primary concern for leaders of small-coalition countries—everything, and everyone, else is inessential. There is no point in spending lots of money on the health of people who are not in the labor force and who won’t be in the labor force for a long time. One of the more depressing ways in which this can be seen is in the relation between the performance of health care systems for infants and the size of a government’s winning coalition.

Indeed, it so happens that even in many autocracies with reportedly good health-care systems, infant mortality is high.

The Cuban economy depended largely on agriculture, especially growing sugarcane, a highly labor intensive activity. As a result, both Batista’s and Castro’s regimes, bereft of natural-resource wealth, had to rely on workers to generate revenue. Each did have the benefit of supplementing that revenue with a significant amount of foreign aid, from the United States in Batista’s case and from the Soviet Union in Castro’s. Nevertheless, to stay afloat, both needed to maintain a healthy and reasonably educated workforce. Therefore, both Batista’s and Castro’s Cuba needed good health care as well as good basic education.

Although a headline fact is that Castro’s Cuba has Latin America’s best infant mortality rate, the details reveal that the relative quality of infant care has declined. Cuba had Latin America’s best infant mortality rate under Batista as well as under Castro. In general, small-coalition regimes gradually run their economy into the ground through inefficiencies designed to benefit the leader and essentials in the short run, at the expense of longer term productivity.

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!

Consider the availability of as basic and essential a public good as clean drinking water. In a world in which easily prevented, waterborne diseases like cholera, dysentery, and diarrhea kill millions of the young and old—non-workers—clean water would be a tremendous lifesaver. The problem is that these are lives that autocrats seem not to value. Sure enough, drinking water is cleaner and more widely available in democratic countries than in small-coalition regimes, independent of the separate and significant impact of per capita income.

Honduras, for instance, is a pretty poor country. Its per capita income is only $4,100. Yet, 90 percent of the people in Honduras have access to clean drinking water. Per capita income in Equatorial Guinea is more than $37,000, nine times higher than in Honduras.8 And yet only 44 percent of its people enjoy clean potable water.

Nevertheless, there is still a balance when it comes to infrastructure. Since roads run in two directions, one must be careful not to build too many roads or, especially, roads to the wrong places. Roads are very costly to build and it is easy to hide their true costs. This makes them a good source of graft,

But having a country too well connected can lead to new regional power centers—political, economic, or otherwise—that undermine the autocrat. And if things ever heat up sufficiently to encourage rebellion, the very roads that autocrats build can come back to haunt them. Shoddy infrastructure is often an intentionally designed feature of many countries, not a misfortune suffered unwillingly.

If the choice of route were just about economics one might think that straight roads from city to airport are especially prevalent in rich countries. But if politics trumps economics, then straight roads will more often be the province of petty dictatorships rather than representative—and rich—democracies. That the difference between driving distance and the distance as the crow flies is related to politics, and especially to how many essentials a leader needs, is rather interesting and perhaps surprising, but related they are.

The lesson is that when an autocrat needs a road to the airport (a good route of escape) he can just confiscate people’s property, making the road as straight and as quickly traveled as possible. As President Obama observed in his State of the Union address on January 25, 2011, when discussing the similar issue of building railroads, “If the central government wants a railroad, they get a railroad—no matter how many homes are bulldozed.” He was contrasting what autocrats can do with what he, as a democratic leader, cannot.

Mobutu famously replaced local electricity-generating capacity near Zaire’s copper mines with a hydroelectric station that was more than 1,000 miles away. This empowered him to cut off electricity at the touch of a button, guaranteeing that he, and not some local entrepreneur, controlled the flow of copper wealth. It’s worth noting that the power lines bypassed all the people along the way. That’s the right sort of infrastructure project taken up by someone who wants to use public policy to secure his hold on power.

Public goods can be for the public’s good. Yet they can also be a means of exploiting the public. In large-coalition environments, public goods overwhelmingly enhance public well-being. In small-coalition settings this is not true.

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.

Remember, as we saw with Louis XIV, no leader ever has absolute power. That’s why leaders need coalition members who support them, and why coalition members need opportunities for enrichment if they are to remain loyal to their leader, empowering her to stay on in office, getting and spending money—on them.

Corrupt politicians are attractive to would-be supporters, and politicians eager for power find it easiest to attract corrupt people to their cause. Leaders want to stay in power and must take whatever actions are needed to do so.

What, then, is an autocrat to do once in power? They should tax excessively—Genghis Khan is said to have levied a tax of 100 percent following a conquest. Being a nomad, he didn’t need those he defeated to produce for the next year, since by then he and his horde would be elsewhere. They should enthusiastically suppress the people—Joseph Stalin worked out that killing many to catch but a few “enemies of the people” was worth the expense and loss of innocent lives. He therefore made clear to his commissars that an exorbitant error rate in executing potential enemies of the people was perfectly acceptable.

Per capita income in Turkey is about $13,730; in Iran only $4,530.4 Thus, despite its vast oil wealth, Iranians, on average, earn only about one third what Turks earn. Tax rates are higher in Iran than in Turkey so, despite the oil wealth, Iran extracts more income tax than does Turkey. Both countries have progressive income taxes although a small group in Iran, known as the Bonyads, is exempt from taxation and even exempt from accusations of corruption. They manage the money of the senior ayatollahs and some key military leaders. The Bonyads are reputed to control 20 to 25 percent of Iran’s annual income—not bad as private benefits go.

As we have noted, Russia is among the world’s most corrupt states. As such, the political logic of private goods can be seen vividly in the workings of its corruption. Low salaries for police forces are a common feature of small coalition regimes and Russia is no exception. At first blush this might seem surprising. The police are crucial to a regime’s survival. Police officers are charged with maintaining civil order—which often boils down to crushing antigovernment protests and bashing the heads of antigovernment activists. Surely inducing such behavior requires either great commitment to the regime or good compensation. But as elsewhere, the logic of corruption takes a more complex turn.

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.

Corruption is a private good of choice for exactly the reasons captured by the Dymovsky Affair. It provides the means to ensure regime loyalty without having to pay good salaries, and it guarantees the prosecutorial means to ferret out any beneficiaries who fail to remain loyal. What could be better from a leader’s perspective?

Fifty-eight votes are all that are needed to guarantee someone’s election to become IOC president or host the games.

Since 1896, the date of the first modern Olympic games, there have been only seven presidents.

Since just twenty-four members of FIFA’s executive committee determine the location of the finals, the winner requires the support of only thirteen members—if that.

Wall Street financial houses distributed $18.4 billion in bonuses in 2008, even though many of the largest Wall Street firms begged for and got billions in bailout money from the federal government.

Africa provides many of the worst cases. Daniel Kaufman, a senior fellow at the Brookings Institute, estimates that more than a trillion dollars is spent annually on bribes worldwide, presumably with most of it going to government officials.

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.

Yes, it is true that a lot of aid is given to corrupt governments but that is by design, not by accident or out of ignorance. Rather, aid is given to thieving governments exactly because they will sell out their people for their own political security. Donors will give them that security in exchange for policies that make donors more secure too by improving the welfare of their own constituents.

This example, while extremely simple, captures the logic of cold war aid flows. The United States provided Liberia’s Sergeant Doe with an average of $50 million per year in exchange for his anti-Soviet stance. This aid did not provide for the welfare of his people, and is coincidentally close to the amount of money Doe and his cronies are alleged to have stolen during his decade in power. From the perspective of survival-oriented leaders, the rationale for aid becomes clear. When the cold war ended, the United States no longer valued anti-Soviet policies and was no longer willing to pay for them. Doe’s government didn’t have much else to offer the United States that American voters valued, so he was cut off.

Buying policy from a democracy is expensive because many people need to be compensated for their dislike of the policy. Buying policies from autocracies is quite a bit easier.

One extremely salient, and hence expensive aid for policy deal was the 1979 Egyptian-Israeli peace treaty. As part of this agreement, Egypt became the first Arab nation to officially recognize Israel. Israel and Egypt ended hostilities that had been nominally ongoing since the 1948 war (and had erupted into actual warfare in 1956, 1967, and 1973).

As can be seen in Figure 7.1, the United States provided enormous economic incentives for the Egyptian president, Anwar Sadat, to visit Israel, attend the Camp David Peace Summit, and sign the treaty.