Bruce Bueno de Mesquita on Democracies and Dictatorships 2/12/2007

The 'winning coalition' is the subset of the selectorate whose support is essential to keep a leader in office, in exchange for which they receive benefits — corruption opportunities, rent-seeking, and bribes.

“the winning coalition are the people who from that selectorate give support are essential their support is essential to keep the leader in office in exchange for which they get benefits from leader usually in the form of corruption opportunities rent seeking bribes”

The 'selectorate' is the set of people who have a meaningful say in choosing leaders, and it varies greatly in size — the electorate in a democracy, the generals and senior civil servants in a military junta, or roughly 300-400 essential people in North Korea.

“by the selectorate I mean the people who have a meaningful say in choosing who leaders are and in a democracy that is the electorate”

Once a free press and free assembly are installed, they are hard to reverse without mass slaughter, which requires soldiers willing to fire on mass movements — and they often are not, as seen in the 1991 Soviet coup and the Velvet Revolutions, especially Poland.

“once people can mobilize for mass movements it is pretty hard to turn that off without mass slaughter which means that them that the soldiers on the ground have to be willing they often are not willing”

Foreign aid is given in exchange for policy concessions that benefit the donor government's democratic constituents, not the recipient's citizens — because if the recipient would follow those policies anyway, there'd be no need to pay them — making aid harmful to recipient citizens while helping autocrats supplement bribes.

“the price to be paid for foreign aid and that is that the recipient makes policy concessions to the donor in exchange for the money that benefits the donor government”

Foreign aid has the same effect as the natural-resource curse because, like oil in the ground, it is money the leader can tap without raising taxes on labor — a 'free good' that sustains bad leaders in office and oppresses the public.

“foreign aid has exactly the same effect because foreign aid like oil in the ground is money that the leader can tap into without having to increase the taxes on labor it's essentially in that sense a free good”

Autocrats have learned to use market economies and the growth markets foster as a mechanism to sustain themselves in power rather than to put themselves at risk — so market reform and democratization are sharply distinct, and a more market-oriented world is not necessarily a more democratic or peaceful one.

“autocrat seem to have learned at least since the end of the Cold War... that they can use market economies and the economic growth that that markets foster as a mechanism to sustain themselves in power rather than to put themselves at risk”

Genuine democracy requires three things beyond vote-counting: freedom of assembly, a free press, and ballots counted by a nonpartisan neutral mechanism — and a very large percentage of countries said to have moved toward democracy lack at least one of these, with international observers mistakenly certifying only the accuracy of counting while ignoring the information and assembly stages.

“our people free to assemble if the answer is no we are not looking at a democratic process is the media free to report whatever it wants if the answer is no we are not looking at a democratic process”

Chavez and Putin understand that elections do not equal democracy: you can hold elections without risk if you control the media and the ability to assemble — Chavez took control of Venezuela's mass media to ensure opponents get zero or negative publicity, financed by oil wealth that lets him fund populism without taxing labor.

“people like Chavez understand as Putin understands in Russia that you can have elections and not have to worry provided for example that you control what the media get to say provided that you control the ability of people to assemble”

Leaders facing domestic problems find it advantageous to blame outsiders, typically the United States, because casting blame elsewhere diverts attention from internal government failures — Chavez and Ahmadinejad use this to explain economic misery they would not want attributed to their own governance.

“when a country has problems as every country does it is always better for the leaders to cast the blame elsewhere and the ripe target is typically the United States”

A core analytical lesson of this worldview is to distinguish between what people say and what they do — assuming what people do reflects what they want, while what they say may just be what they think you'd like to hear.

“you learn to distinguish between what people say and what they do it's a very valuable lesson in life”

The larger the winning coalition, the more efficient it is for leaders to rule by producing public goods rather than private rewards, because there are too many cronies to bribe individually — coalition size acts as the implicit price of private goods, which de Tocqueville observed.

“the bigger the coalition the more you have to spend money on public goods rather than private rewards for the cronies and that's because there are too many cronies to pass out the guy”

When the selectorate is very large relative to the winning coalition, the incumbent need not spend as much to keep supporters loyal, because a defector has a low probability of being essential to a rival — leaving more discretion for the leader to keep resources for himself or pursue clever or dumb policies.

“when the pool is very large and the set of people you need is very small if you're in the coalition getting goodies and you defect to a rival politician deciding to support that person the probability that you will be essential to that person down the road is pretty low because there are lots of substitutes for you”

Hitler did not fully mobilize the German steel industry early in WWII (unlike WWI) because he feared losing the loyalty of comfortable middle-class supporters if he stopped producing consumer goods — driving his need for slave labor and the Ukraine — and only cranked up the war effort late when defeat clearly meant being deposed, while the Allies mobilized fully from day one.

“Hitler did not mobilize the German steel industry for example to the level that had been mobilized in World War one because he feared losing the support of his of a young Corrales to be precise if he didn't continue to manufacture consumer goods”

China's economic growth postponed pressures for democratization rather than hastening them — refuting the Lipset-style argument that a rising middle class would demand political voice — as 28 years on the Communist Party remains the sole arbiter of policy with continued elite privilege and rampant corruption.

“this is a very common argument whose argument articulated in the 50s by Seymour Martin Lipset... but it was wrong we are now 28 years since Doong introduced the economic reforms in China and the Communist Party remains the sole arbiter of all policy”

Putin allows fair vote-counting and multiple parties precisely because he is confident that controlling the media (manipulation of information) is sufficient to ensure his electoral victory — making fair counting unnecessary to suppress.

“this government controls access to information they control the media so why not allow fair counting if you are confident that the manipulation of information is sufficient to ensure your election”

Dictators must maintain a certain level of public economic productivity because if they extract too much, workers consume leisure instead of working and have no incentive to produce, leaving no replacement money to keep the coalition loyal — a delicate balance every leader must follow.

“you don't want to extract so much from the the working public that they consume lots of leisure instead of working that they they have no incentive to work because then of course you won't have replacement money in the future”

The median Chinese person does not have meaningfully more information access despite economic growth — gains accrue disproportionately to the urban wealthy, while most Chinese remain poor in remote areas; the real question is whether the growing information threat from urban centers exceeds the regime's ability to offset it through expanded corruption opportunities.

“do I think the median person has more access no... most people in China are still incredibly poor they are in relatively remote areas”

China would likely repeat a Tiananmen-style crackdown today because they learned that 'nothing happened' — foreign investors care about the predictability of governance, not its nature, so the economic consequences of repression were brief and quickly disappeared.

“they learned a very important lesson from gentleman square nothing happened well there was you know for a few weeks there were some economic consequences only for a few weeks and then they disappeared”

The World Bank is itself a small-coalition political entity whose loan decisions are made by representatives of guaranteed-risk banks and recipient-country governments who profit from continued flows — so it does what is incentive-compatible for its constituents rather than advancing welfare, and exists fundamentally to make loans.

“the World Bank is itself a political entity that has a small coalition system”

Cronies are relatively eager to push for war because they expect to expand their booty and their heads are less likely to roll than the leader's, so they pressure the leader toward war more often than the leader might prefer — and the leader must respond to keep them loyal.

“they're always relatively eager to push for war because certainly gonna expand their their booty and their plunder and their head is less likely to roll than the leaders”

Multinational oil firms (e.g., BP in Nigeria) deliberately bring in foreign workers rather than training locals because they are interested only in extracting wealth and going home, not changing the government — so the presence of foreign business is not a pressure for democratization, since local know-how could be used for political purposes.

“why does the Nigerian government bring in British Petroleum workers from Europe... rather than training Nigerians because the the BP folks aren't interested in changing the government they're just interested in getting their money and going home”

Dictators are never truly able to do whatever they want; even Hitler had to curry favor with a group of relatively comfortable middle-class supporters he viewed as necessary, contradicting the cartoon image of an all-powerful dictator able to wage total war freely.

“the dictator is never really a dictator the way we the cartoon version where the dictator can quote do whatever he wants he still asked to curry favor with with folks”

China began economic reform in 1979 because the Great Leap Forward and Cultural Revolution had devastated the economy and the resource flow sustaining the Communist Party's power, so the Party brought Deng Xiaoping back from exile and adopted his previously discredited market ideas to revitalize their hold on power — not to democratize.

“prior to dongs return China had gone through a lengthy period of two monumentally stupid policies the Great Leap Forward and the Cultural Revolution both of which were a huge leap backwards in terms of sustaining the economy and sustaining the flow of resources that ensured that the Communist Party could continue to sustain itself in power”

Autocrats can be more adventurous in war because they are judged on delivering goodies to cronies, not policy performance — so they fight in a broader range of circumstances, are less likely to add resources when losing if it would cost their cronies, and survive defeat as long as they keep paying cronies and aren't removed by a victorious foreign rival.

“autocrats by contrast since they are not judged primarily on their policy performance but rather on their ability to deliver goodies to their cronies can afford to be more adventuresome in war as long as they keep enough resources in reserve”

Democratic leaders are highly selective about wars, choosing fights they believe they will almost certainly win, because losing a war nearly guarantees they are deposed — and when a war goes badly they increase effort (double up) because winning is the public good that matters.

“democratic leaders are necessarily much more selective about the wars they fight because Democratic leaders are almost certain of being deposed that is not re-elected if they lose a war”

Autocrats start wars for two reasons: they have policy beliefs (sometimes that conquering neighbors will expand the extractable resource base via land grabs or tribute), and because their rent-seeking inefficient economies run down over time, creating a shortage of resources to bribe cronies — exemplified by Saddam Hussein's 1991 move on Kuwait's oil fields.

“because dictators run inefficient economies remember they distort the economy to reward their cronies so they run inefficient economies over time they begin to run into a shortage of resources for bribing their cronies and then they need to find some other source”

Japanese media obtain their information only from government ministries and are therefore not truly free, because they would lose access to government information if they reported independently.

“the Japanese media get their information from the government ministries only they are not that free they don't have access to rapport the opportunity to report independent information and hope to continue to have access to the government information”

The implicit tax rate is higher when the coalition is small: in North Korea, with per-capita income around $600, the average tax rate is about 10%, whereas in the US a person with comparable income pays nothing — so the comparable-income person in North Korea pays a much higher rate to feed the leadership's rent-seeking demands.

“give you an example in North Korea where per-capita income is about $600 the tax rate on average is about 10% in the United States the federal tax rate is about 20% on average”

Democracies cut aid to elected governments whose policies they dislike (e.g., Hamas in the Palestinian Authority) because voters prefer cutting money to inducing better policies over funding abhorrent ones — making it anti-democratic for a re-election-seeking leader to fund foreign agendas their constituents reject.

“Hamas is the freely elected leadership in the Palestinian Authority as soon as they were elected the United States our European allies and of course Israelis cut off economic assistance”

Ahmadinejad's nuclear weapons program is a skillful political strategy: it resonates with young professionals' pride amid a declining economy, restores Iran's primacy as the exporter of Shia fundamentalism against the rising al-Qaeda, creates bargaining leverage, and secures his hold on power — not the act of a madman.

“Iran has been losing its dominant position as the exporter of Islamic fundamentalism especially Shia fundamentalism... so part of the nuclear program is a political competition for securing Iran's primacy”

China faces a coming challenge as rising coastal labor costs push low-end manufacturing elsewhere, forcing a shift to higher-technology production requiring more educated, better-informed workers — which the regime counters by keeping education technology-oriented rather than liberal-arts and aggressively controlling search engines and internet information flow.

“the cost of labor has been bid up sufficiently that a lot of low-end manufacturing is moving away from China... China is making an attempt to shift to higher technology kinds of production”

Aid programs have actually been successful, not failures — but what they succeed at is keeping recipient policies aligned with donor desires and keeping autocrats in power, not the publicly stated goals like reducing poverty.

“aid programs have been successful not unsuccessful it's just that what they succeed at is not what most people who have studied a think the objective is such as reducing poverty”

Foreign aid not only discourages leaders from reforms but makes it easier for them to purge rivals and tighten their grip — when facing a credible threat, the rational response is to shrink the coalition and cut public goods rather than democratize.

“it makes it easier for them to purge people and tighten further their grip on government so that if they face a credible threat to their hold on power it it makes it more sensible for their response to be to reduce the size of the coalition”