Book Summary: “The Dictator’s Handbook” by Mesquita & Smith


Book Review

Title: The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics
Author: Bruce Bueno de Mesquita and Alastair Smith
Scope: 4 stars
Readability: 4 stars
My personal rating: 5 stars
See more on my book rating system.

Topic of Book

This is the best that has ever been written about how authoritarian leaders stay in power. Since authoritarian leaders have been the dominant form of leadership in history, this book helps us understand centralized power and why it stifles innovation.

Key Take-aways

  • Leaders cannot lead unilaterally. No matter how powerful, an authoritarian leader must maintain support from a group of followers.
  • The smaller the group of followers and the more substitutable those followers are, the more power the leader has.
  • Leaders must maintain a flow of money to the regime to maintain their power.
  • Corruption, i.e. ensuring that money flows to key followers, is the foundation of every authoritarian regime.
  • Authoritarian leaders should not waste money on programs that benefit anyone other than their followers.
  • Successful, educated or popular people outside the regime are a potential threat, so they must be eliminated or drawn into the coalition.

Important Quotes from Book

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,

One important lesson we will learn is that where politics are concerned, ideology, nationality, and culture don’t matter all that much.

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.

We must stop thinking that leaders can lead unilaterally… no emperor, no king, no sheikh, no tyrant, no chief executive officer (CEO), no family head, no leader whatsoever can govern alone.

For leaders, the political landscape can be broken down into three groups of people: the nominal selectorate, the real selectorate, and the winning coalition. A simple way to think of these groups is: interchangeables, influentials, and essentials.

The nominal selectorate includes every person who has at least some legal say in choosing their leader.

The second stratum of politics consists of the real selectorate. This is the group that actually chooses the leader.

The most important of these groups is the third, the subset of the real selectorate that makes up a winning coalition. These are the people whose support is essential if a leader is to survive in office.

Variations in the sizes of these three groups give politics a three-dimensional structure that clarifies the complexity of political life…. 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.

it is important to emphasize that the term “dictatorship” really means a government based on a particularly small number of essentials drawn from a very large group of interchangeables and, usually, a relatively small batch of influentials. On the other hand, if we talk about democracy, we really mean a government founded on a very large number of essentials and a very large number of interchangeables, with the influential group being almost as big as the interchangeable group. When

Thus small coalitions encourage stable, corrupt, private-goods-oriented regimes.

Staying in power, as we now know, requires the support of others. This support is only forthcoming if a leader provides his essentials with more benefits than they might expect to receive under alternative leadership or government.

When the ratio of essentials to interchangeables is small (as in rigged-election autocracies and most publicly traded corporations), coalition loyalty is purchased cheaply and incumbents have massive discretion.

Five basic rules leaders can use to

Rule 1: Keep your winning coalition as small as possible. A small coalition allows a leader to rely on very few people to stay in power.

Rule 2: Keep your nominal selectorate as large as possible. Maintain a large selectorate of interchangeables and you can easily replace any troublemakers in your coalition,

Rule 3: Control the flow of revenue. It’s always better for a ruler to determine who eats than it is to have a larger pie from which the people can feed themselves. The most effective cash flow for leaders is one that makes lots of people poor and redistributes money to keep select people—their supporters—wealthy.

Rule 4: Pay your key supporters just enough to keep them loyal. Remember, your backers would rather be you than be dependent on you. Your big advantage over them is that you know where the money is and they don’t.

Rule 5: Don’t take money out of your supporter’s pockets to make the people’s lives better. The flip side of rule 4 is not to be too cheap toward your coalition of supporters.

What he did know was how to seize power and keep it: remove the previous ruler; find the money; form a small coalition; and pay them just enough to keep them loyal.

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.

One thing that is always expedient is remaining solvent. If a ruler has run out of money with which to pay his supporters, it becomes far easier for someone else to make coalition members an attractive offer. Financial crises are an opportune time to strike.

Autocratic politics is a battle for private rewards. Democratic politics is a battle for good policy ideas.

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

Bloc leaders gain a lot, their members gain less, and the rest of society pays the price. Bloc voting takes seemingly democratic institutions and makes them appear like publicly traded companies. Every voter or share has a nominal right to vote, but effectively all the power lies with a few key actors who can control the votes of large numbers of shares or deliver many votes from their village.

Building a small coalition is key to survival. The smaller the number of people to whom a leader is beholden the easier it is for her to persist in office.

Leaders buy support by rewarding their essential backers relative to others. Taxation plays a dual role in generating this kind of loyalty. First it provides leaders with the resources to enrich their most essential supporters. Second, it reduces the welfare of those outside of the coalition.

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.

Borrowing is a wonderful thing for leaders. They get to spend the money to make their supporters happy today, and, if they are sensible, set some aside for themselves. Unless they are fortunate enough to survive in office for a really long time, repaying today’s loan will be another leader’s problem.

Highly educated people are a potential threat to autocrats, and so autocrats make sure to limit educational opportunity. Autocrats want workers to have basic labor skills like literacy,

The key to a loyal coalition truly is money.

The best way to deal with corruption is to change the underlying incentives. As coalition size increases, corruption becomes a thing of the past.

Autocrats must find the right balance. Without enough freedom the people are less productive and do little work, but give them too many freedoms and they pose a threat to the leader. The degree to which autocrats rely on taxation to fund the government limits the extent to which they can oppress the people.

Nations awash with natural resource wealth or lavished with foreign aid rarely democratize. They are the world’s most oppressive places. Their leaders have resources to reward their essential supporters without having to empower the people.

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. These “good” revolutionaries just are not as lucky as Libya’s Colonel Muammar Qaddafi or Kazakhstan’s Nursultan Nazarbayev.

The essential facts of political life are that people do what is best for them. Thus, except under extreme duress, leaders don’t expand the coalition; the masses press for democratization; and essential supporters vary in what they want. This latter group can be made better off by contractions in the number of coalition members—that is, with coups and purges—provided they are the ones retained. Democratization can also make them better off. It is therefore this group that offers the greatest prospect for constructive, as well as destructive change.

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