Bruce Bueno de Mesquita on Democracies and Dictatorships
Feb 12 2007

Bruce Bueno de Mesquita of NYU and Stanford University's Hoover Institution talks about the incentives facing dictators and democratic leaders. Both have to face competition from rivals. Both try to please their constituents and cronies to stay in power. He applies his insights to foreign aid, the Middle East, Venezuela, the potential for China's evolution to a more democratic system, and Cuba. Along the way, he explains why true democracy is more than just elections--it depends crucially on freedom of assembly and freedom of the press.

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Casey Mulligan of the University of Chicago talks with EconTalk host Russ Roberts about life in Cuba. Mulligan, who recently returned from a trip to Cuba, discusses the economy, the standard of living and some of the peculiarities of communist...
Explore audio highlights, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.
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John Henry
Feb 15 2007 at 12:48pm

Is this a rerun? It is pretty good (as all your podcasts are) but I am sure I heard it before.

John Henry

Feb 15 2007 at 2:25pm

The concept of the selectorate is an interesting one – but I am not as sanguine as Bruce about the flexibility of democratic systems. The podcast got me to think a bit about the implications of whether the theory could be applied to the US.   De Mesquita makes the point that the payoff matrix for democratic systems tend to be distributed to a larger group and thus the net take of the tax system is smaller than would be in less democratic systems (I am re-reading the Wealth of Nations now and re-found Smith’s great line about taxes as being “violent and forcible extraction” ).  But I think there are some evolving trends that may change the way of the selectorate in the US.   In the last 20 years the American political system has evolved in a couple of troubling ways.  First, our leaders are getting better and better at rent seeking – the transformation of the GOP congress in less than 10 years to one of the most corrupt congresses in my memory (I worked in Congress and the White House in the early 1970s)is a good example of the risks.  Their use omnibus legislation and earmarks was very troubling.   I realize the GOP got rebuked in part for that and that the new majority has pledged to reduce the kinds of earmarks that the last congress reveled in – but I am also sure that the first imperative for any member of congress is to get re-elected.

Second, in the name of security, we have allowed our leaders to separate themselves from the rest of us.  The Pelosi flap on the airplane reinforced the view that our elected officials from the president on down increasingly are in cocoons.  Members of Congress very rarely speak directly to their constituents – they have erected walls of separation in many ways.  In the name of security it is now impossible to pass even semi-freely in the halls of congress.  Members of Congress often travel in non-commercial ways – even with the “reforms” (remember Roscoe Conkling’s great line -” those who fear the attraction that patriotism has for scalawags and scofflaws, have missed the clarion call of reform.”) of the new majority in congress I am skeptical that the American people will be able to connect more directly with their members.   With both of those things going on – what would de Mesquita say about the consistency of his theory or more to the point the current “moral hazards” facing the American system? Do we have an evolving selectorate that is different from the expected one?

Russ Roberts
Feb 15 2007 at 3:59pm

John Henry,

It’s not a re-run. It covers some similar ground that I covered with Bruce the first time we talked–the theory of the selectorate and some of the discussion of foreign aid. But the differences between democracies and dictatorships in their likelihood of going to war and the discussions of China, the Middle East and Cuba is all new.

Feb 15 2007 at 4:26pm

The comment about the US is interesting. The theory suggests that corruption by politicians, as a proportion of government revenue, gets lower as coalition size gets larger but corruption/rent seeking/private goods allocations (e.g., personal jets) do not go to zero. The selectorate theory also contends that systems that depend on a larger winning coalition tax at a lower rate (relative to a given income level), thereby helping to stimulate more economic activity. This has the effect of making it simultaneously possible that the proportion of revenue used for corrupt purposes is low but that the absolute dollar value of such corruption is high (because the absolute revenue generated by government is high). That seems to be the case in the United States.

It is interesting to speculate on whether the electorates tolerance for corruption diminishes faster than the rate at which revenue growth provides opportunities for large absolute levels of corruption (albeit at low percentage levels). If that is the case, then we will see further limits imposed on legislators because of pressure from their constituents. If tolerance for corruption declines slowly, however, then the mid-term election will not serve as a cautionary tale for the new Congress.

John Henry
Feb 18 2007 at 11:58am

“It’s not a re-run. It covers some similar ground”

I listened to the whole thing last night. While it starts off similar to the previous podcast, it is very different and covers a lot of interesting new ground.

I particularly enjoyed the discussion about China.

Sorry for doubting you Russ. I always look forward to the podcast.

John Henry

Mar 9 2007 at 10:06pm

Bruce’s analysis is interesting and illuminating. I’ve studied political science at university and have followed these issues for decades and consider Bruce’s insights among the most useful.

One thing bothers me however. Is it true that democracies really are less warlike than non-democratic regimes? There are certainly prominent advocates of “democratic peace theory” about, and indeed this has become something of official rhetoric in foreign policy matters, at least to some extent, by both the Bush and Clinton administrations.

But my impression is that the empirical support for the democratic peace theory is, at best, weak. The tables reproduced in the article here make me skeptical of claims that democracies are more peaceful.

Of course there is a confounding factor here. Democracies, or at least relatively free market societies, are generally economically more successful which has a rough translation into the potential military capability available to their governing elites. So the cost of conducting foreign wars to a wealthy democracy is relatively lower than for less economically productive and more dictatorial regimes. Disentangling this “war as a luxury good” element would seem to me to be problematic.

I’d love to know Russ and Bruce’s thoughts on this. Would it be possible to address it in your podcast’s Q&A section sometime?




Podcast Episode Highlights
1:07Different incentives faced by democracies, autocracies, juntas, oligarchies, etc. Selectorate refers to those who choose the leader. Winning coalition's absolute size and size relative to the selectorate both matter for type of benefits distributed. Large absolute size contributes to more public goods, hence more for general population. Large relative size of winning coalition (relative to size of selectorate) contributes to less distribution of grafts and booty.
7:17In both cases, still want public to continue to work, so the leader has a supply of incoming resources to distribute. Implicit tax rate depends on size of winning coalition. North Korea example.
9:39Other sources of sustaining leader: Natural resource sector--oil, gold, diamonds--can be a curse. Foreign aid functions in the same way. Foreign aid is a form of paying off the leader and actually harms the public. It helps sustain leaders in office who are doing a bad job for the public. Recipient makes policy concessions for foreign aid (called "conditionality"), but the policies the recipient sells are ones the public doesn't like. Makes it easier for leader to tighten hold on government, rather than supplying public goods. What about the winning coalitions that include "good guys"? Hamas example. Iran example. Voters in donor country face choice: support candidates who endorse giving money to leaders who are democratic but whose policies are abhorrent, vs. cutting back aid to try to induce better policies; and historically, voters choose the latter.
16:48But what about examples from countries whose interests are not at odds with the U.S., not national-security related? 1. U.S. voters respond to countries from which they emigrated. 2. World Bank itself is a political entity which has its own coalition system. Doesn't end up meaning advancing the welfare of the public in the recipient countries. Bill Easterly: The Elusive Quest for Growth, The White Man's Burden. "Aid is successful at keeping countries' policies in line with the desires of the donor", and in keeping autocrats in power. What people do and what they say are not the same thing.
22:30Different incentives to go to war in democracies vs. autocracies. Democratic leaders will almost certainly be deposed if they lose a war, which makes them very selective about picking their battles, and, if a war turns out to be difficult, they increase their effort. Autocratic leaders, since they are judged by goodies to their cronies, are willing to fight in broader swath of circumstances, more likely to find themselves in trouble in war, and less likely to put in extra resources. WWII example, Germany. Benefits from war also differ between democratically elected leaders versus autocratically supported leaders. Autocrats tend to fight wars to seek to increase their resource bases because they are running their economies down and have to pay cronies.
32:17Why the recent bellicose stances in countries like Venezuela and Iran? Are they just run by madmen? Nuclear weapons program in Iran supported by young professionals, while state of economy has gotten run down. Mahmoud Ahmadinejad is bolstering his constituent base by finding an issue with popular support. Hugo Chavez in Venezuela attempted a failed coup as a military leader and is bolstering his newly-found constituency. If you control the ability of people to assemble you can control the media and secure your hold on power. Oil wealth allows a semblance of looking populist by not increasing taxes. In all dictatorship cases, it's easier to point to an outsider as the source of internal problems than to accept responsibility, so the U.S.'s economic success makes it a target of rhetoric. Is Iran's nuclear policy unduly risky?
42:40What's a real democracy? Is the world becoming more democratic? Market economies vs. democracy: Autocrats have learned that market economies and growth can sustain them. Are elections the solution? Charlie Rose, Egypt example. Requirements for democracy: 1. Are people free to assemble? 2. Are the media free to report? (Japan is an example where media are not that free! Egypt, Haiti worse.) 3. Is the vote balance counted by a non-partisan, neutral presence? It's not enough to only satisfy number 3., neutral vote-counting. Russia example--neutral vote-counting is not enough. Short run solutions don't conform to long run solutions.
48:19China example--free markets may not be enough. Information flow, growth statistics, labor laws. Foreign private investors up. But is life really changing for the average person in China?
59:30What policies could the U.S. follow to help? Nigeria example--British petroleum workers are brought in to Nigerian oil fields but Nigeria doesn't train their own people. Window of opportunity. Dictators in their first two or so years die in their sleep or are overthrown when it is discovered they have a terminal illness. Free assembly and free press can be put into place during this window. Linking aid to those two pillars during that window may help make genuine democracy and ultimately prosperity persist. Cuba.

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