I expected "The Dictator's Handbook" to belong to the genre of "bathroom readers" along with the likes of "The Worst Case Scenario Survival Handbook" and "The Dangerous Book for Boys." I was expecting colorful portraits of dastardly dictators and their evil escapades (like Robert Greene's "48 Laws of Power"). Instead, I found a very serious scholarly work written by fellows of Stanford's Hoover Institution. The authors are the founders of a branch of political science called "selectorate theory" which contends that dictators stay in power by keeping their winning coalition small and by paying them off with private goods at the expense of the general public. They remind us that "States don’t have interests. People do," and keep us focused on the political power calculus of the ruling elites. Sardonically, they categorize dictators into the "Hall of Fame," "Hall of Shame," and the "Haul of Fame."
Through the lens of selectorate theory, the authors explore corruption in resource-rich African states (hitting many of the same points as "The Looting Machine"), International Olympic Committee and Fifa scandals (also see "The Fall of the House of Fifa"), and how foreign aid often perpetuates problems rather than solving them. They even venture a bit outside of politics to apply selectorate theory to Carly Fiorina's HP/Compaq merger.
Jaunty and highly readable, "The Dictator's Handbook" gives us a new way of seeing the world. Written in a sort of "Freakonomics" style, the book manages to cover a lot of ground without getting too bogged down in technical details. An excellent addition to my 2018 reading theme on "Crime and Punishment."
My highlights below:
How do tyrants hold on to power for so long? For that matter, why is the tenure of successful democratic leaders so brief? How can countries with such misguided and corrupt economic policies survive for so long? Why are countries that are prone to natural disasters so often unprepared when they happen? And how can lands rich with natural resources at the same time support populations stricken with poverty?
In this book, we’re going to provide a way to make sense of the miserable behavior that characterizes many — maybe most — leaders, whether in government or business. Our aim is to explain both good and bad conduct without resorting to ad hominem claims. At its heart, this will entail untangling the reasoning and reasons behind how we are governed and how we organize.
Surely he and the town leaders with whom he worked were deserving of praise and tangible rewards for their good service to the people of Bell. Behind the idyllic façade, however, lies a story that embodies how politics really works. You see, Robert Rizzo, hired at $72,000 a year in 1993, and in his job for seventeen years before being forced to step down in the summer of 2010, at the end of his tenure was earning a staggering $787,000 per year.
The answers lie in a clever manipulation of election timing. The city’s leaders ensured that they depended on very few voters to hold power and to set their compensation.
What, you may well ask between yawns, is the difference between a general city and a charter city? The answer is day and night: decisions are made in the open daylight in general cities and often in secret, behind closed doors in charter cities.
the special election, associated with no other ballot decisions, attracted fewer than 400 voters (336 in favor, 54 opposed) in a town of 36,000 people. And so the charter passed, placing within the control of a handful of people the right to allocate city revenues and form the city budget, and to do so behind closed doors. As best as one can tell, the charter changed nothing else of consequence concerning Bell’s governance. It just provided a means to give vast discretion over taxing and spending decisions to a tiny group of people who were, as it happens, making choices about their own compensation.
As of this writing all of the principal players in Bell’s scandal have been jailed, but not for their lavish salaries. As reprehensible as these may have been, it seems they were perfectly legal. No, they were jailed for receiving payments for meetings that allegedly never took place. It seems they collected a lot of money while overlooking their obligation to actually attend committee meetings.
Whatever the reason for the vote being divided among so many candidates, it is evident that election could be achieved with support from only a tiny percentage of Bell’s adult population.
One thing we can be sure of: those on the city council could not have been eager for competing candidates (or even fellow council member Velez) to get wind of the truth about their compensation package. City manager Rizzo had to maintain the council’s confidence to keep his job and they needed his support to keep theirs.
It is in this need for mutual loyalty that we see the seeds of Bell’s practices and of politics in general.
First, politics is about getting and keeping political power. It is not about the general welfare of “We, the people.” Second, political survival is best assured by depending on few people to attain and retain office.
Third, when the small group of cronies knows that there is a large pool of people waiting on the sidelines, hoping to replace them in the queue for gorging at the public trough, then the top leadership has great discretion over how revenue is spent and how much to tax.
Fourth, dependence on a small coalition liberates leaders to tax at high rates, just as was true in Bell. Taxing at high rates has a propensity to foment the threat of popular uprisings, just as happened in Bell.
When addressing politics, we must accustom ourselves to think and speak about the actions and interests of specific, named leaders rather than thinking and talking about fuzzy ideas like the national interest, the common good, and the general welfare. Once we think about what helps leaders come to and stay in power, we will also begin to see how to fix politics. Politics, like all of life, is about individuals, each motivated to do what is good for them, not what is good for others.
Fearing the masses, Hobbes saw monarchy as the natural path to order and good governance. Believing in the necessary benevolence of an absolute leader, the Leviathan, he also concluded that, “no king can be rich, nor glorious, nor secure, whose subjects are either poor, or contemptible, or too weak through want, or dissension, to maintain a war against their enemies.”
What are the consequences for leaders and their regimes when a war is lost? Oddly, that question had not been much addressed in the copious research on international affairs, and yet surely any leader would want to know before getting involved in a risky business like war what was going to happen to him after it was over. This question hadn’t been asked because the standard ideas about war and peace were rooted in notions about states, the international system, and balances of power and polarity, and not in leader interests.
States don’t have interests. People do.
The prime mover of interests in any state (or corporation for that matter) is the person at the top — the leader. So we started from this single point: the self-interested calculations and actions of rulers are the driving force of all politics.
Enter James D. Morrow — now a professor at the University of Michigan but back then a Senior Research Fellow at Stanford’s Hoover Institution, where Bueno de Mesquita was also based —and Alastair Smith. And so a foursome was born (sometimes affectionately known as BdM2S2). Together we wrote a thick, dense, technical tome called The Logic of Political Survival
1 - The Rules of Politics
To understand politics properly, we must modify one assumption in particular: we must stop thinking that leaders can lead unilaterally.
While most of us think of a state’s bankruptcy as a financial crisis, looking through the prism of political survival makes evident that it really amounts to a political crisis. When debt exceeds the ability to pay, the problem for a leader is not so much that good public works must be cut back, but rather that the incumbent doesn’t have the resources necessary to purchase political loyalty from key backers.
Louis’s specific circumstances called for altering the group of people who had the possibility of becoming members of his inner circle — that is, the group whose support guaranteed his continued dignity as king. He moved quickly to expand the opportunities (and for a few, the actual power) of new aristocrats, called the noblesse de robe. Together with his chancellor, Michel Le Tellier, he acted to create a professional, relatively meretricious army. In a radical departure from the practice observed by just about all of his neighboring monarchs, Louis opened the doors to officer ranks — even at the highest levels — to make room for many more than the traditional old-guard military aristocrats, the noblesse d’épée. In so doing, Louis was converting his army into a more accessible, politically and militarily competitive organization.
By elevating so many newcomers, Louis had created a new class of people who were beholden to him. In the process, he was centralizing his own authority more fully and enhancing his ability to enforce his views at the cost of many of the court’s old aristocrats. Thus he erected a system of “absolute” control whose success depended on the loyalty of the military, the new aristocrats, and on tying the hands of the old aristocrats so that their welfare translated directly into his welfare.
Fundamentally, the nominal selectorate is the pool of potential support for a leader; the real selectorate includes those whose support is truly influential; and the winning coalition extends only to those essential supporters without whom the leader would be finished. A simple way to think of these groups is: interchangeables, influentials, and essentials.
In fact, given the federal structure of American elections, it’s possible to control the executive and legislative branches of government with as little as about one fifth of the vote, if the votes are really efficiently placed.
Differences in the size of these groups across states, businesses, and any other organization, as you will see, decide almost everything that happens in politics
Because the acceptable uses of taxation in a regime that depends on a large coalition are few — just those expenditures thought to buy more welfare than people can buy on their own — taxes tend to be low when coalitions are large. But when the coalition of essential backers is small and private goods are an efficient way to stay in power, then the well-being of the broader population falls by the wayside, contrary to the view expressed by Hobbes.
For example, a married couple in the United States pays no income tax on the first $17,000 they earn. At that same income, a Chinese couple’s marginal tax rate is 45 percent.
It is the successful, reliable implementation of political promises to those who count that provides the basis for any incumbent’s advantage.
These people, once among Fidel’s closest, most intimate backers, ultimately faced the two big exes of politics. For the luckier among them, divorce from Castro came in the form of exile. For others, it meant execution.
Each member of a winning coalition, knowing that many are standing on the sidelines to replace them, will be careful not to give the incumbent reasons to look for replacements.
Rule 1: Keep your winning coalition as small as possible.
Rule 2: Keep your nominal selectorate as large as possible.
Rule 3: Control the flow of revenue.
Rule 4: Pay your key supporters just enough to keep them loyal.
Bravo to Zimbabwe’s Robert Mugabe who, whenever facing a threat of a military coup, manages finally to pay his army, keeping their loyalty against all odds.
Rule 5: Don’t take money out of your supporter’s pockets to make the people’s lives better.
Why, for example, does Congress gerrymander districts? Precisely because of Rule 1: Keep the coalition as small as possible.
2 - Coming to Power
Doe funded his government, as his predecessors had, with revenues from Firestone, which leased large tracts of land for rubber; from the Liberian Iron Mining Company, which exported iron ore; and by registering more than 2,500 ocean - going ships without requiring safety inspections. Further, he received direct financial backing from the United States government. The United States gave Doe’s government $500 million over ten years. In exchange the United States received basing rights and made Liberia a center for US intelligence and propaganda. It is believed that Doe and his cronies personally amassed $300 million.
To come to power a challenger need only do three things. First, he must remove the incumbent. Second, he needs to seize the apparatus of government. Third, he needs to form a coalition of supporters sufficient to sustain him as the new incumbent.
That is, the general rule of thumb for rebellion is that revolutions occur when those who preserve the current system are sufficiently dissatisfied with their rewards that they are willing to look for someone new to take care of them.
Paying supporters, not good governance or representing the general will, is the essence of ruling.
Khomeini became leader because he provided a focal point for opposition to the shah’s regime, and because the army did not stop the people from rising up against the monarchy.
These are not isolated examples. Laurent Kabila, once maligned by Che Guevara as lacking “revolutionary seriousness” and being “too addicted to alcohol and women,” took on the mighty Mobuto Sese Seko of Zaire and won. Kabila lacked much in talent, but his timing was excellent. Mobuto was dying of prostate cancer and everybody knew it. His military simply refused to fight back as Kabila’s insurgents captured more and more territory.
By designating heirs who might keep the existing winning coalition largely intact, these leaders sought to prevent the incumbency advantage from disappearing as their ability to deliver on political promises was brought into jeopardy.
Why might he run out of money? Because he has taxed so heavily and stolen so much that the masses choose siestas over labor, stymieing the future flow of revenue into the government’s treasury.
Ottoman succession could be bloody. Unsuccessful brothers were typically killed. Mehmet II (1429–1481) institutionalized this practice with the fratricide law, under which all unsuccessful male heirs were strangled with a silk cord. A century later, Mehmet III allegedly killed nineteen brothers, two sons, and fifteen slaves who were pregnant by his own father, thereby eliminating all present and future potential rivals. By the middle of the seventeenth century this practice was replaced by the kinder, gentler practice of locking all male relatives in the Fourth Court of the Topkapi Palace — quite literally the original Golden Cage. With relatives like this, it is perhaps no wonder why Shakespeare’s Hamlet or Robert Graves’s Claudius chose to feign madness.
Would-be autocrats must be prepared to kill all comers — even members of the immediate family. The Ottomans formalized this while the English merely relied on the tradition of doing in their rivals.
Supporting inheritance inevitably means giving up the chance to become king yourself. Yet, that is just one side of the calculation. With so many people who would like to be king, the chance of landing the top job is tiny. In reality, supporters of the late king are often best off to elevate his son and hope that he then dances with the one that brought him to the ball.
If you are a prince and you want to be king, then you should do nothing to dissuade your father’s supporters of their chances of being important to you too. They will curry favor with you. You should let them. You will need them to secure a smooth transition. If you want them gone (and you may not), then banish them from court later.
History has shown that regents are notoriously bad caregivers. Provided a regent is prepared to kill his charge, being entrusted with the care of the would-be future king is a great way to become king.
Leaders often nominate their successor and sometimes choose from outside of their immediate relations, perhaps because they understand the dire risks to family if they turn to one member and not another. For instance, the first Roman emperor, Augustus, formally adopted his successor, Tiberius. Mob bosses often do the same. Carlo Gambino nominated “Big” Paul Castellano to succeed him as head of his New York mafia family. In each case, the designated successor was seen as someone likely to continue the programs and projects of the prior leader. Therefore, there wasn’t much rush to replace the old leader. The new, designated successors might even enhance the old boss’s reputation.
For Christianity’s first several hundred years, the Bishop of Rome — the pope — was a relatively minor figure even within the Christian community. Bishops were the arbiters of Christian practice and belief, but not until Damasus I, pope from 366 to 384, was the Bishop of Rome truly elevated above all other Roman Catholic bishops, becoming the head of the western Roman Catholic Church.
How did Damasus expand his appeal to the masses — the interchangeables — many of whom had opposed his papacy? It seems that many of the recently converted lay people of the declining Roman Empire missed their many pagan Roman gods. Damasus recognized that these same people seemed happy to substitute the many Christian martyrs for those gods. Damasus focused his energy on discovering the burial places of martyrs and erecting great marble monuments.
Anyone who thinks leaders do what they ought to do — that is, do what is best for their nation of subjects — ought to become an academic rather than enter political life. In politics, coming to power is never about doing the right thing. It is always about doing what is expedient.
There is never a point in showing your hand before you have to; that is just a way to ensure giving the game away.
There is a common adage that politicians don’t change the rules that brought them to power. This is false. They are ever ready and eager to reduce coalition size. What politicians seek to avoid are any institutional changes that increase the number of people to whom they are beholden.
But this is not to say there are no private goods in democratic politics. There are. And this explains why dynastic rule is common even in democracies. It may be surprising to learn, for instance, that a careful study finds that 31.2 percent of American female legislators (and 8.4 percent of men) had a close relative precede them in their political role. Nearly 20 percent of American presidents were close relatives of each other. That’s a lot more than chance and fair competition suggest.
That democrats need so many supporters makes them vulnerable. If you can find an issue over which the incumbent’s supporters disagree, then it will soon be your turn to lead. Divide and conquer is a terrific principle for coming to power in a democracy — and one of the greatest practitioners of this strategy was Abraham Lincoln, who propelled himself to the US presidency by splitting the support for the Democratic Party in 1860.
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: “Where is the money? What is the bank account number?” Doe didn’t answer.
3 - Staying in Power
The novelist Italo Calvino has clearly and succinctly described the tribulations of those who have risen to power: “The throne, once you have been crowned, is where you had best remain seated, without moving, day and night. All your previous life has been only a waiting to become king; now you are king; you have only to reign. And what is reigning if not this long wait? Waiting for the moment when you will be deposed, when you will have to take leave of the throne, the scepter, the crown, and your head.”
Once the deal was sealed Fiorina would have to bring some Compaq leaders onto the postmerger HP board. This could be done either by expanding the existing board to accommodate Compaq influentials or by pruning the existing board to make room for the new, Compaq representatives drawn from Compaq’s selectorate. Fiorina apparently saw that the merger would provide an opportunity to reconstitute the board, providing an undeniable opportunity to weaken the board faction that opposed her. That seems to be exactly what she tried to do.
As it happens, Securities and Exchange Commission (SEC) regulations require disclosures, which make turning a board purge into a fait accompli extremely difficult when the opportunity to purge the board depends on a prospective merger.
But autocracy isn’t about good governance. It’s about what’s good for the leader, not what’s good for the people. In fact, having competent ministers, or competent corporate board members, can be a dangerous mistake. Competent people, after all, are potential (and potentially competent) rivals.
Saddam Hussein in Iraq, like Idi Amin in Uganda and so many other eventual national leaders, started as a street thug.
Saddam Hussein came to power after compelling his predecessor (and cousin) Ahmed Hassan al-Bakr to resign in 1979. Before that, however, he had carefully laid the groundwork for his control over Iraq. In 1972, for instance, he spearheaded the nationalization of international oil interests in Iraq. Oil, of course, was and is where the money is in Iraq, so he had fulfilled the essential ingredient to come to power: he knew where the money was. Once in power, he ruthlessly pruned his support base.
Both leaders knew that it is better to have loyal incompetents than competent rivals.
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.
Even in modern times the principle of choosing close advisers who cannot rise to the top spot remains good advice. It is surely no coincidence that Saddam Hussein as president of Islamic Iraq had a Christian, Tariq Aziz, as his number two.
Virtually every publicly traded company in the world has adopted the Leninist rigged-election system and for much the same reasons. It, along with a packed board, is one of the major factors ensuring that poorly performing CEOs hardly ever get fired.
The execution of opponents is a longstanding practice among most autocrats. We should not fail to appreciate the moral significance of Gorbachev’s restraint. Adolf Hitler, Mao Zedong, Fidel Castro, Samuel Doe, and so many others showed no such restraint.
Mugabe was even harsher towards his former comrades in arms. He forced Nkomo out of the cabinet and sent a North Korean trained paramilitary group, the Fifth Brigade, to terrorize Matabeleland, Nkomo’s regional stronghold. As one ZANU minister put it, “Nkomo and his guerillas are germs in the country’s wounds and they will have to be cleaned up with iodine. The patient will scream a bit.” The operation was called Gukurahundi — a Shona word that means, Wind that blows away the chaff before the spring rains.
As we all know, the victor writes history. Leaders should therefore never refrain from cheating if they can get away with it.
The conventional wisdom about America’s two-party system tells us that fringe parties allow for a more vibrant and responsive government. But even in multiparty states, there are always leading parties — you have to ask yourself whether the leading parties would allow the fringe parties to exist if they weren’t somehow serving their interests.
Designated seats for underrepresented minorities is another means by which leaders reduce the number of people upon whom they are dependent. Such policies are advertised as empowering minorities, whether they are women, or members of a particular caste or religion. In reality they empower leaders. That a candidate is elected by a small subset of the population reduces the number of essentials required to retain power.
That, indeed, is the lesson of bloc voting whether based on personal ties in Bihar, trade union membership among American teachers, tribal clans in Iraq, linguistic divisions in Belgium, or religion in Northern Ireland. Bloc leaders gain a lot, their members gain less, and the rest of society pays the price.
Bribing voters works far better at the bloc level. Suppose there are just three villages, and suppose a party, call it party A, negotiates with senior community figures in the villages and makes the following offer: if party A wins it will build a new hospital (or road, or pick up the trash, send police patrols, plow the snow, and so on) in the most supportive of the three villages.
Lee Kuan Yew ruled Singapore from 1959 until 1990, making him, we believe, the longest serving prime minister anywhere. His party, the People’s Action Party (PAP), dominated elections and that dominance was reinforced by the allocation of public housing, upon which most people in Singapore rely. Neighborhoods that fail to deliver PAP votes come election time found the provision and maintenance of housing cut off.
Ownership of a public company works in the same way as bloc voting. We could hold our shares in our own name and vote at stockholder meetings. However, except for a very wealthy few of us, our votes are inconsequential and turning up is burdensome. Thus we hold stock via mutual funds and pensions
Although autocrats survive longer, they find surviving the initial period in office particularly difficult. During their first half year they are nearly twice as likely to be deposed as their democratic counterparts. However, if they survive those first turbulent months, then they have a much better chance of staying in power than democrats.
4 - Steal from the Poor, Give to the Rich
“Knowing where the money is” is particularly important in autocracies — and particularly difficult. Such systems are shrouded in secrecy. Supporters must be paid but there are no accurate accounts detailing stocks and flows of wealth. Of course, this lack of transparency is by design. Thus does chaotic bookkeeping become a kind of insurance policy: it becomes vastly more difficult for a rival to promise to pay supporters if he cannot match existing bribes, or, for that matter, put his hands on the money.
Leaders face three constraints on how much money they can skim from their subjects. First, taxes diminish how hard people work. Second, some of the tax burden inevitably will fall upon the essential backers of the leader. (In general, the first constraint limits taxes in autocracies and the second constraint sets the boundary on taxes in democracies.) The third consideration is that tax collection requires both expertise and resources. The costs associated with collecting taxes limit what leaders can extract and shapes the choice of taxation methods.
Further, even when nominal rates are low, autocracies have high implicit taxes — if you have something valuable then it simply gets taken. It’s worth remembering that the wealthiest man in China and the wealthiest man in Russia are both currently in prison.
In autocracies, it is unwise to be rich unless it is the government that made you rich. And if this is the case, it is important to be loyal beyond all else.
Furthermore, the large bureaucracy required to run a comprehensive tax system, such as the one in the United States, can be prohibitively expensive. To put this in context, the US’s Internal Revenue Service spends about $38 per person, or about 0.5 percent of the IRS take, on collecting an average of $7,614 in tax per person. This is fine in a nation with per capita GDP of $46,000, but in nations with incomes of only $1,000 per year, such a cost of collecting taxes would be about 23 percent of the revenue.
Consider Ghana’s Cocoa Marketing Board (CMB). Cocoa is Ghana’s major agricultural export. The CMB fixes a price for cocoa — an implicit tax — and insists that farmers sell all their cocoa to the board at that price, an indirect tax. The board then resells the cocoa on world markets at a higher price and pockets the difference: “The first rung in the long ladder of leeches that feed on the sweat of the cocoa farmers is the Cocoa Marketing Board.” These rents have been a major source of government revenue in Ghana.
Autocrats can avoid the technical difficulties of gathering and redistributing wealth by authorizing their supporters to reward themselves directly. For many leaders, corruption is not something bad that needs to be eliminated. Rather it is an essential political tool. Leaders implicitly or sometimes even explicitly condone corruption. Effectively they license the right to extract bribes from the citizens. This avoids the administrative headache of organizing taxation and transferring the funds to supporters. Saddam Hussein’s sons were notorious for smuggling during the 1990s when Iraq was subject to sanctions. They made a fortune from the sanctions that were supposed to harm the regime.
As many leaders have learned, the problem with raising revenue through taxation is that it requires people to work. Tax too aggressively or fail to provide an environment conducive to economic activity and people simply don’t produce. Actually extracting revenue from the land itself provides a convenient alternative, cutting the people out of the equation altogether.
From 1970 to 2000, Nigeria had accumulated $350 billion in oil revenue. It has not helped the people. Over the same years, average annual income per capita went from US$1,113 in 1970 to US$1,084 in 2000, making Nigeria one of the poorest nations in the world, in spite of its vast oil wealth.
One interesting manifestation of the differences between wealth and poverty in resource-rich lands is the cost of living for expatriates living in these countries. While it is tempting to think that cities like Oslo, Tokyo, or London would top the list as the most expensive places, they don’t. Instead it is Luanda, the capital of the southwestern African state of Angola. It can cost upwards of $10,000 per month for housing in a reasonable neighborhood, and even then water and electricity are intermittent.
It is ironic that while oil revenues provide the resources to fix societal problems, it creates political incentives to make them far worse.
In practice, the only leverage lenders have over nations is to cut them off from future credit. Nevertheless, this has a profound effect, as the ability to engage in borrowing in financial markets is valuable. For this reason nations generally pay their debt.
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.
5 - Getting and Spending
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.
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.
From a leader’s point of view, the most important function of the people is to pay taxes.
Public benefits like essential infrastructure, education, and health care, need to be readily available to ensure that labor is productive enough to pay taxes to line the pockets of rulers and their essential supporters. These policies are not instituted for the betterment of the masses, even though, of course, some members of the masses, especially workers, benefit from them.
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.
That this uneven distribution of top-notch universities favors large-coalition locales is no accident. Highly educated people are a potential threat to autocrats, and so autocrats make sure to limit educational opportunity.
Dictators also like to have their children educated in leading universities in the United States, and especially at Oxford University in the United Kingdom. In fact, one might almost conclude that Oxford is a breeding ground for authoritarians. It certainly is the alma mater of many, including Zimbabwe’s Robert Mugabe, the Bhutto family of Pakistan, kings of Jordan, Bhutan, Malaysia, and even little Tonga.
One thing that both dictatorships and democracies have in common is the special advantage insiders seem to have when it comes to the top universities.
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.
Resources should instead be focused on those who help the ruler stay in power now, not those who might be valuable in the distant future. When you see pictures and images flowing out of populations in crisis, it’s apparent that suffering at the extremes of the life span is hardly uncommon in autocracies.
Roads are very costly to build and it is easy to hide their true costs. This makes them a good source of graft, which in turn makes constructing them attractive. But having a country too well connected can lead to new regional power centers — political, economic, or otherwise — that undermine the autocrat.
Massive construction projects, like the Aswan Dam in Egypt and China’s Three Gorges Dam, are very much like Mobutu’s power grid. These sorts of projects are great for autocrats. Although they dislocate vast numbers of people, they also generate vast corruption opportunities, making them gems of private rewards as well as providers of basic public infrastructure. It is noteworthy that they also cost vastly more to build than comparable dams in the United States or other democratic countries, where such projects serve primarily to advance public — not private — welfare.
China, like Chile, suffered a 7.9 earthquake of its own. It struck in May 2008, bringing down many shoddily constructed schools and apartment buildings, killing nearly 70,000. Even accounting for variations in Chile’s and China’s populations and incomes, it is impossible to reconcile the difference between China’s death toll and Chile’s, except by reflecting on the incentives to enforce proper building standards in democratic Chile — incentives missing in autocratic China and Iran.
6 - If Corruption Empowers, Then Absolute Corruption Empowers Absolutely
Anyone unwilling to undertake the dirty work that so many leaders are called on to do should not pursue becoming a leader.
The most powerful leaders in history, people like Genghis Khan, Henry V, or Russia’s Catherine the Great, tend to be autocrats beholden to only a small coalition. Those who are most successful, especially in the modern world, also enjoy a secure means of extracting vast revenues, such as mineral wealth. Provided they remain healthy, such leaders are practically unassailable. That is to say, they are as close to being absolute leaders as one can get.
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.
But with Democrats more often controlling legislatures at the federal and state level than Republicans, it is worth noting that more than 40 percent of Americans — mostly at the lower income levels — pay no income taxes at all. That, after all, is one of the private rewards they covet just as in smaller coalition regimes the rich pay few taxes and covet their private gains.
Low salaries for police forces are a common feature of small coalition regimes and Russia is no exception.
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.
As for Dymovsky’s whistle-blowing, it did prompt a response from the Kremlin. Russia’s central government passed a law imposing tough penalties on police officers who criticize their superiors. As the Times notes, the law has come to be known as “Dymovsky law.”
The 2002 Salt Lake City winter games are perhaps remembered almost as much for scandal and bribery as they are for athletic excellence. The Salt Lake Organizing Committee (SLOC) spent millions of dollars on entertainment and bribes, which included cash, lavish entertainment and travel, scholarships and jobs for relatives of IOC members, real estate deals, and even plastic surgery. In the fallout, ten IOC members were removed or resigned, ten others were reprimanded, and Tom Welch and Dave Johnson, who headed the SLOC, were prosecuted for fraud and bribery.
The negative publicity surrounding the corruption scandal did inspire the IOC to promise reforms and to place restrictions on gifts, luxury travel, and perks in bidding cities. But as the dictates of political survival leads us to expect, this was unlikely to last since the Olympic organizations are all small-coalition operations. In fact, an undercover investigation by the BBC’s news program Panorama suggests bribery is still active. In the runup to the announcement of the location of the 2012 games, secretly taped meetings suggest a price on the order of around $100,000–$200,000 per IOC vote. Distressing to sports lovers to be sure, but this is no surprise to anyone who thinks about political survival.
Fifty-eight votes are all that are needed to guarantee someone’s election to become IOC president or host the games. Not surprisingly, IOC presidents keep their jobs for a long time and maintain lavish expense accounts. Since 1896, the date of the first modern Olympic games, there have been only seven presidents.
The IOC is not alone in engendering corruption. FIFA, soccer’s international governing body, is even worse.
As the number of supporters needed increases, private goods become less important. Bribery could easily be made a thing of the past by simply expanding the IOC. For instance, all Olympians might be made IOC members eligible to vote for the executive officers and the site of future games.
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.
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.
Leaders sometimes miscalculate what is needed to keep the coalition happy. When they make this mistake it costs them their leadership role and, very often, their life. The stories of crime boss “Big” Paul Castellano and Roman emperor Julius Caesar are cautionary tales for any who would make the mistake of not giving the coalition its due.
Castellano rewarded himself at the expense of his supporters and it cost him his life. A few thousand years earlier, Julius Caesar’s mistake was to help the people at the expense of his backers and this too cost him his life. Julius Caesar’s death at the hands of some of his closest supporters is often portrayed as the slaying of a despot. But the facts don’t support this interpretation. Julius Caesar was a reformer. He undertook important public works, from redoing the calendar and relieving traffic congestion, to stabilizing food availability. He also took steps specifically designed to help the poor. For instance, he provided land grants to former soldiers and got rid of the system of tax farming, replacing it with a more orderly and predictable tax system. Not only that, he relieved the people’s debt burden by about 25 percent. Not surprisingly, though these policies were popular with the people, many came at the expense of Rome’s prominent citizens. Tax farming was, of course, lucrative for those lucky few who got to extract money from the people. High indebtedness was also lucrative for those who were owed money. These groups found Caesar’s reforms hitting them straight in their anachronistic pocketbooks and, therefore, not at all to their liking. Popular though many of his reforms might have been with the man on the street, they harmed the welfare of the powerful influentials and essentials, and it was of course these people who cut him down.
Those who are most successful at stealing for their own benefit open the door to joining our Haul of Fame.
Mr. Suharto, referred to by The Economist magazine as the king of kleptocrats, is alleged by Transparency International to have stolen up to $35 billion from his country.
Despite their alleged thievery, the Marcos family, remarkably, is making a political comeback in the Philippines. It seems money really makes the world — of politics — go round!
But unlike Mao, Mikhail, and Nikita, Deng belongs squarely in the hall of fame. Like them, he was not accountable to the people and, like them, he was not hesitant to put down mass movements against his rule. The horrors of Tiananmen Square should not be forgotten. But unlike his fellow dictators, he actually had good ideas about how to improve economic performance. Deng and Singapore’s Lee Kwan Yew are surely among the contemporary world’s two greatest icons of the authoritarian’s hall of fame.
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.
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.
If politicians want to end massive bonuses for bankers then they need to pass legislation that fosters the restructuring of corporate government, so that chief executive officers and board chairs really depend on the will of their millions of shareholders (and not on a handful of government regulators).
We have amassed considerable evidence that securities fraud is more likely to be committed by firms with financial problems and a large coalition than by firms with comparable financial problems and a small coalition. After all, executives who depend on a relatively large coalition are particularly vulnerable to being replaced when corporate performance is poor. Being at greater risk of deposition, larger coalition executives try to hide poor corporate performance through fraudulent reporting. What is more, one of the best early-warning indicators of corporate fraud is that senior management is paid less — not more — than one would expect given the firm’s reported performance!
7 - Foreign Aid
When it comes to foreign policy, a democrat is prone to behave more like a devil than an angel. In fact, in targeting her policies at foreign governments she is likely to be little better than the tyrannical leaders who rule those very foreign regimes.
There is no shortage of similar instances, where aid is misappropriated and misdirected by the recipient governments. To take just one prominent example, 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.
In her book, It’s Our Turn to Eat, Michela Wrong describes the exploits of an idealistic bureaucrat, John Githongo.
It is hard to believe that aid agencies remain so naïve as to not understand how misused their funds are. Perhaps the truth lies in another aim of the USAID — “furthering America’s foreign policy interests.” Perhaps the United States is more interested in having a reliable ally in its fight against global terrorism and needs assistance combating Somali pirates in the Indian Ocean.
The truth is, foreign aid deals have a logic of their own. Aid is decidedly not given primarily to alleviate poverty or misery; it is given to make the constituents in donor states better off. Aid’s failure to eliminate poverty has not been a result of donors giving too little money to help the world’s poor. Rather, the right amount of aid is given to achieve its purpose — improving the welfare of the donor’s constituents so that they want to reelect their incumbent leadership. Likewise, aid is not given to the wrong people, that is, to governments that steal it rather than to local entrepreneurs or charities that will use it wisely. 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.
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.
Poor autocracies are most likely to get aid, but they don’t get much. Although they may have great needs, they can be bought cheaply.
Those who celebrate the prospects of democracy in Egypt and favor peace with Israel have a problem.
By February 2010 they had captured the number two Taliban leader, but, as we should expect, they have also been careful not to wipe out the Taliban threat. Doing so would just lead to a termination of US funds.
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.
Aid agreements are notorious for being tied to conditions that help the donor. This means that the agreement often specifies how, and more importantly where, the money is spent. For instance, Germany might give a recipient money, but only if they use it to buy German tractors. This might seem an inefficient way to reward tractor manufacturers. However, international trade laws often forbid direct subsidies. Further, tied aid can bring future business, such as spare parts and service. Canada is notorious for high levels of tied aid, 60–75 percent of all its aid. Scandinavia and the UK claim to have the lowest levels of tied aid, but even there, informal tying is common.
The record is unambiguous: foreign assistance has proven ineffective at alleviating poverty and promoting economic growth.
UNSC membership gives leaders the opportunity to sell salient policy support. As we have seen over and over again, autocrats need to pay off their coalition. Aid provides the money to do so and that helps leaders survive. Further, aid encourages autocrats to reduce freedoms for two reasons. First, aid revenue means leaders are less dependent upon the willingness of people to work, so the leader does not need to take as many of the risks that arise from freedom, risks they must take when their revenue and worker productivity depends upon allowing people to communicate with each other. Second, the policy concessions are generally unpopular, so leaders need to suppress dissent. UNSC membership brings prominence and prestige to a nation. For an autocratic leader it also means more easy money. For the people of autocratic nations the UNSC means fewer freedoms, less democracy, less wealth, and more misery.
Nongovernmental organizations (NGOs) have proven that they can effectively deliver basic health care and primary education. Yet harking back to our discussion of public goods provided by small-coalition regimes, we can’t help but notice that these benefits are precisely the kinds of public policy programs that even the most autocratic leaders want to initiate. NGOs are less successful at providing advanced education. Autocratic leaders in recipient states don’t want people to be taught how to think independently enough that they could organize opposition to the government.
However, in practice, recipients are very skilled at converting aid into the kinds of rewards they want rather than the kind of rewards donors want them to provide.
When aid funds are used to substitute for government spending, then few, maybe even no one, has actually been helped unless the government uses the freed-up money for other projects of benefit to the general population. Of course, they don’t. They use the money to shore up their political position and the loyalty of their essential backers.
For instance, agriculture is highly protected from competition in Europe and North America through price supports and subsidies. Agriculture was deliberately excluded from the postwar trade settlement established by the General Agreement on Tariffs and Trade (GATT) and its controversial successor, the World Trade Organization (WTO). This is because rural areas are disproportionately represented in some countries and so farmers tend to be the essential backers of leaders in many European countries. Allowing farmers from developing nations to compete on the basis of comparative advantage would go much further toward promoting economic growth than providing poorly targeted and highly bureaucratized aid.
The fundamental problem is that recipient governments are not appropriately incentivized to fix problems.
Aid incentivizes autocratic leaders to fail to fix problems.
Through 2008 the United States has paid Pakistan $6.5 billion in economic and military aid for its assistance. If Pakistan had captured bin Laden and prevented the Taliban from operating in northern Pakistan, then the United States would have been very grateful. But it would also no longer have needed to pay Pakistan. As with effective disaster management that limits the number of disaster victims, capturing bin Laden would have ended aid to Pakistan’s leaders, as his death may do now.
The modus operandi of the international community is to give recipient nations money to fix problems. A common argument is that the locals know much better how to address their problems than do far-away donors. That’s probably true, but knowing how to fix local problems and having the will or interest to do so is quite another matter. This policy of giving money to recipients in anticipation of their fixing problems should stop. Instead the United States should escrow money, paying it out only when objectives are achieved.
Democracies often claim that they want to democratize other nations. They frequently justify both aid and military intervention on this basis, but the evidence that they actually promote democracy is scant. Those who defend such policies tend to cite Germany and Japan after World War II, but that was sixty or so years ago, and on close examination it took many years before these nations developed (or were permitted to develop) independent foreign policies. The reality is that in most cases democracies don’t want to create democracies.
And herein lies the rub. Dictators are cheap to buy. They deliver policies that democratic leaders and their constituents want, and being beholden to relatively few essential backers, autocrats can be bought cheaply. They can be induced to trade policies the democrat wants for money the autocrat needs. Buying democrats is much more expensive.
Undermining democracy was the story behind US opposition to the Congo’s first democratically elected prime minister, Patrice Lumumba.
The massive bulk of evidence today points to US and Belgian complicity in Lumumba’s murder.
And then we ought not to forget the overthrow of democratically elected Juan Bosch in the Dominican Republic at the hands of the American military in 1965. His offense: he liked Fidel Castro.
The incipient democracies in the Gulf are unlikely to be positively inclined toward US interests, in part because of deep policy differences and in part because we’ve been funding for decades the oppression under which they were governed.
Despite the idealistic expressions of some, all too many of us prefer cheap oil to real change in West Africa or the Middle East. So we really should not complain too much when our leaders try to deliver what we want. That, after all, is what democracy is about.
8 - The People in Revolt
If a regime excels at convincing people that stepping out of line means incredible misery and even death, it is unlikely to experience rebellion.
The extent of expected loyalty from the military is one critical factor that shapes the direction an incumbent takes in responding to a nascent threat.
A prudent dictator nips rebellion in the bud. That is why we have reiterated the claim that only people willing to engage in really nasty behavior should contemplate becoming dictators.
These freedoms also make protest easy. But since people like these freedoms, granting them can also dissipate their desire to bring down the government. Protests are common in democracies but revolts intending to overthrow the institutions of government are not. Democrats provide the policies people want because otherwise the people will protest, and when people can freely assemble there is little a leader can do to stop them except give them what they want.
Given their druthers, autocrats eliminate freedom of assembly, a free press, and free speech whenever they can, thereby insulating themselves from the threat of the people. Unfortunately for autocrats, without the public goods benefits from these freedoms, people can find it hard to work effectively because they cannot easily exchange ideas even about how to improve the workplace. And if the people don’t work effectively, then the leader cannot collect tax revenues.
The factors that lead to rebellion are relatively uncomplicated. How much a leader does to enhance the welfare of the people by providing public goods determines the desire of the people to rebel. The level of freedom determines the ease with which they can act upon these desires by taking to the streets. Yet, though high levels of either factor are in evidence in a host of countries around the world, protests remain rare. They require a spark.
A massive natural disaster, an unanticipated succession crisis, or a global economic downturn that drives the autocrat’s local economy to the brink or beyond the brink of bankruptcy can also provide a rallying cry for protesters.
Natural disasters, while bringing misery to the people, can also empower them. One frequent consequence of earthquakes, hurricanes, and droughts is that vast numbers of people are forced from their homes. If they are permitted to gather in refugee camps, then they have the opportunity to organize against the government. You see, refugee camps have the unintended consequence of facilitating free assembly. Earthquakes, storms, and volcanoes can concentrate large numbers of desperate people with little to lose. They also can substantially weaken the state’s capacity to control the people.
Effectively the government told these survivors to go away and die quietly: inhumane in the extreme, but good small-coalition politics. Dead people cannot protest.
In a telling 2005 account of how unhappy the people are, a journalist for the Economist magazine recalls how they were continually asking him how the United States could be prevailed upon to invade: “the prospect of a foreign invasion is a fond hope, not a fear.” The people of Burma want to be the next Iraq!
Burma is a huge exporter of natural gas, hardwood, gems, gold, copper, and iron. For instance, it is thought to earn about $345 million through the annual export of 1.4–1.6 million cubic meters of hardwood, much of it extremely valuable teak.
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.
Democratic revolutions are most often fought by people who cannot count on great natural resource wealth to sustain them once they overthrow the predecessor regime.
Rigged exchange rates lay at the heart of Ghana’s economic problems and its system of political rewards. The official exchange rate for Ghana’s currency, the cedi, was much higher than the black market rate. Essential backers were allowed to exchange money at the official exchange rate and then convert it on the street. Unfortunately this eroded the incentives of farmers. By the early 1980s, it often cost farmers more for fuel to take goods to markets than they earned by selling them.
Financial crises, from an autocratic leader’s perspective, are political crises. The leader hasn’t cared a whit about destroying his country’s economy by stealing from the public. Now that money is in such short supply that he can’t maintain his coalition’s loyalty there is a moment of opportunity for political change. Forgive the debts and the leader will just start borrowing again to pay his cronies and keep himself in power. Nicolas Van de Walle compares the fates of regimes in Benin and Zambia with Cameroon and Ivory Coast during crises. In the former cases, international financial institutions withdrew support and the nations democratized. In the latter cases, France stepped in with financial support and no reform occurred.
9 - War, Peace, and World Order
THE BIBLE’S FIRST RECORD OF WAR ARISES WHEN the kings of Shinar, Ellasar, Elam, and Goiim fight the kings of Sodom, Gomorrah, Admah, Zeboiim, and Bela, two thousand years after biblical creation. The world has not seen that long a stretch without war again.
While completely counterintuitive, military men who lead juntas, and other forms of autocratic leaders, are much worse at fighting wars than their civilian counterparts who lead democratic governments.
The reason Sun Tzu has served so many leaders so well over twenty-five centuries is that his is the right advice for kings, chieftains, and autocrats of every shape to follow. Until recently, and with very few exceptions, small-coalition systems have been the dominant form of government. But these are the wrong policies for a leader beholden to many. Democratic war fighting emphasizes public welfare, exactly as should be the case when advising a leader who relies on a large coalition.
Weinberger’s doctrine does not emphasize swift victory, but rather a willingness to spend however much is needed to achieve victory, a point made even more emphatically in the Powell Doctrine. Weinberger and Powell argue that the United States should not get involved in any war in which it is not prepared to commit enough resources to win.
Although conflict involves putting soldiers at risk, democrats do what they can to mitigate such risk. In autocracies, foot soldiers are not politically important. Autocrats do not waste resources protecting them.
In a small-coalition regime, the military serves two crucial functions. It keeps the incumbent safe from domestic rivals and it tries to protect the incumbent’s government from foreign threats. In a large-coalition government, the military pretty much only has to worry about the latter function.
Thinking back to our discussion of foreign aid, we can see that war for democrats is just another way of achieving the goals for which foreign aid would otherwise be used. Foreign aid buys policy concessions; war imposes them. Either way, this also means that democrats, eager as they are to deliver desired policies to the folks back home, would much prefer to impose a compliant dictator (surely with some bogus trappings of democracy like elections that ensure the outcome desired by the democrat) than take their chances on the policies adopted by a democrat who must answer to her own domestic constituents.
Autocrats are much less sensitive to defeat.
This democratic propensity to pick on weak foes is nothing new. Looking at all wars for nearly the past two centuries, we know that about 93 percent of wars started by democratic states are won by them. In contrast, only about 60 percent of wars started by nondemocracies are won by them.
One of the problems with seeking a policy solution is that after the democrat’s army leaves, the vanquished nation can renege. Enforcing the settlement can be very expensive, as was the case after the Gulf War. A common solution, and the one eventually used against Saddam Hussein, is leader replacement. Democrats remove foreign leaders who are troublesome to them and replace them with puppets. The leaders that rise to the top after an invasion are more often than not handpicked by the victor.
US foreign policy is awash with examples where the United States overtly or covertly undermines the development of democracy because it promoted the policies counter to US interests. Queen Liliuokalani of Hawaii in 1893, Salvador Allende of Chile in 1973, Mohammad Mosaddegh of Iran in 1953, and Jacobo Arbenz of Guatemala in 1954 all suffered such fates.
Advocates of democratization are fond of pointing out the success stories. Yet all of these cases — Germany, Japan, South Korea, and Taiwan — also happen to involve countries whose population’s values largely coincide with American values in resisting for decades large communist neighbors.
Clausewitz had war right. War, it seems, truly is just domestic politics as usual. For all the philosophical talk of “a just war,” and all the strategizing about balances of power and national interests, in the end, war, like all politics, is about staying in power and controlling as many resources as possible.
10 - What Is To Be Done?
A man always has two reasons for doing anything: a good reason and the real reason. —J. P. MORGAN
Backsliding is, and should be, the way leaders deal with problems. It is the existing rules that have allowed them to seize and control resources to date. A headlong plunge into new ways of conducting politics might only heighten a leader’s risk of being overthrown.
Appeals to ideological principles and rights are generally a cover. J. P. Morgan had it right: There is always some principled way to defend any position, especially one’s own interests.
Leaders and their essentials share a preference for dependence upon a small coalition, at least so long as the coalition is very small. However, 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.
As the coalition gets even larger it becomes nearly impossible for a leader to induce coalition members to perpetrate a purge or for a rival to organize a coup.
Members of a small coalition live in luxurious, but constant, fear: make the coalition smaller, as their leader wants, and they may be out; make the coalition bigger and their special privileges diminish. But decreased privileges are much better than the danger of being out altogether. So, there are two times when the coalition is most receptive to the urge to improve life for the many, whether those are the people or shareholders: when a leader has just come to power, or when a leader is so old or decrepit that he won’t last much longer.
A wise coalition, therefore, works together with the masses to foster an expanded coalition. The people cooperate because it will mean more public goods for them and the coalition cooperates because it will mean reducing the risk of their ending up out on their ear.
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.
Surely it would be relatively simple to design firm-specific Facebooks or other networking sites. Companies maintain lively web sites to put their view across but entrepreneur-owners have not stepped forward to do the same to help organize the mass of little owners and to provide a way for them to share views. Sure, there are bloggers writing about anything and everything, but there don’t seem to be shareholder-controlled sites to exchange thoughts and ideas about a company that participants own in common. If something like this existed, the size of the influential, informed voters in any corporation would go way up. Then, for the first time, boards would really be elected by their owners and then the board would need, like any leadership group, to be responsive to their large coalition of constituents. A simple change that exploits the Internet to be a conduit for increasing coalition size can turn the AIGs, Bank of Americas, General Motors, and AT&Ts of the world into big-coalition regimes that serve their millions of small owners instead of a handful of senior managers.
All such skeptics should remember that social networking web sites have already successfully mobilized revolutions and brought down governments. Changing corporate governance is far easier.
On average, the Northern states developed more rapidly than the Southern states. It is tempting to ascribe this to the traditional historical narratives and attribute the general difference to climate or slavery. However, a careful examination of the subtle differences between the states suggests that variations in their political institutions were the main culprit behind how differently they developed.
The lesson here is clear. While all the states had the same nominal rules, redistricting and enfranchisement criteria matter in creating differences in the competitiveness of political systems and the development of the states. If properly attended to, districting and enfranchisement decisions could make the United States an even better place than it currently is.
Gerrymandering is especially pernicious because it translates into two conflicting consequences. The average American is greatly dissatisfied with the job that Congress does and the average American is happy with his or her member of Congress. The latter is true because districts are constructed by politicians to give their preferred party a majority and so, by definition, the majority in any district is likely to be content. But this is a great perversion of governance. A small coalition of state legislators pick their voters instead of millions of voters picking their representatives. When politicians pick who votes for them it comes as no surprise that politicians are easily reelected and barely held accountable.
As a simple principle, gerrymandering could be greatly diminished by turning redistricting over to some computer programmers and mathematical political scientists, who could design rules that are not district specific but that instead apply common principles of fair representation across all districts.
Slavery has been outlawed for about 150 years and yet the electoral college persists, and the primary reason, even if rarely spoken out loud, for its survival is that it allows politicians to construct a coalition of essential supporters that is substantially smaller than would be the case under direct election.
A simple fix that lifts everyone’s longer term welfare is to grandfather in immigrants. Amnesty for illegal immigrants — a dirty word in American political circles — is a mechanism to choose selectively those who demonstrate over a fixed period their ability to help produce revenue by working, paying taxes, and raising children who contribute to the national economy, national political life, and national social fabric.
In looking for places that may be good targets for democratization, it is probably a good idea to look to places that rely on tourists for a big chunk of their economy, like Kenya, Fiji, and an independent Palestine, which hopes to be a big tourist destination. Reliance on tourism is, of course, only one reason that an autocrat might allow just enough freedom that opponents might see how to organize and revolt. Any profound economic strain will do just fine in turning thought to liberalization provided the strain is so deep that there isn’t enough money around to buy political loyalty.
The right moment almost always depends on their country having a new leader, a sick leader, or a bankrupt leader.
Using foreign aid to set up nationwide wireless access to the Internet and to provide the poor with mobile phones could be a win-win-win-win among the four constituencies affected by aid. Leaders will gain because commerce will improve, generating more revenue for their discretionary use. Some donor constituents will benefit because they will sell the necessary technology to their government to be given in aid. That will make them happier with their incumbent, improving the democratic donor’s chances for reelection. And unlike most aid, citizens in the recipient countries will also benefit. First, they will have a better chance to make a good living. Second, they will be in a better position to freely assemble over the Internet and press their government for greater freedom and reliance on a larger coalition.
Those who reject the technology will also be helping the cause of freedom. By saying no to technology that helps the people help themselves, they will make clear that they are intransigent autocrats.
South Africa’s Nelson Mandela taught the world an important lesson when he came to power. Alas, it is a lesson only poorly learned. Following the collapse of the apartheid government, he organized truth and reconciliation commissions. These were designed to provide people who had oppressed the apartheid regime’s opponents to come forward, confess their crimes, and be granted amnesty. The United Nations certainly could build a body of international law that motivates dictators facing rebellion to turn power over to the people peacefully. The UN could prescribe a process for transition from dictatorship to democracy. At the same time it could stipulate that any dictator facing the pressure to grant freedom to the people would have a brief, fixed period of time, say a week, to leave the country in exchange for a blanket perpetual grant of amnesty against prosecution anywhere for crimes committed as his nation’s leader. There is clear precedence for such a policy. It is common practice to give criminals immunity if they agree to testify. Some victims are bound to resent that the perpetrator of heinous acts goes unpunished. Unfortunately, the alternative is to leave the dictator with few options but to gamble on holding onto power through further murderous acts. Certainly there is little justice in letting former dictators off the hook. But the goal should be to preserve and improve the lives of the many who suffer at the hands of desperate leaders, who might be prepared to step aside in exchange for immunity.
The transition to being fabulously wealthy figureheads of constitutional monarchies is an option the Saudi Arabian royal family, the Jordanian royal family, and the royal families of the Emirates might well contemplate as a better option than trying to crush rebellion.
Russian incumbents don’t need to cheat in counting votes to get the outcome they want. They don’t need to block people from getting into the polling place. They deprive the opposition from having access to a free press and from holding rallies so, sure, observers will easily conclude that elections were free and fair in the narrow sense, and just as easily we can all recognize that they were neither really free nor fair. Ultimately, elections need to follow expanded freedom and not be thought of as presaging it!
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.
The president’s “solemn duty” highlights the problem. There is an inherent tension between promoting democratic reform abroad and protecting the welfare of the people here at home.
Our individual concerns about protecting ourselves from unfriendly democracies elsewhere typically trump our longer term belief in the benefits of democracy.
In academic circles, our work has become known as selectorate theory.
Selectorate theory offers a powerful, yet simple to use, model of politics. It forms the basis for the models in Punishing the Prince, for instance. That book, by Fiona McGillivray and Alastair Smith, examines how leaders sanction leaders in other states.
We are also grateful to the Hoover Institution, Yale University, and Washington University in St. Louis for their support.
Our fondest hope is for the well-being and success of those who imperil their lives to keep dictators in check.