The Dictator's Handbook: Why Bad Behavior Is Almost Always Good Politics [Englisch] [Gebundene Ausgabe]

Robert Rizzo -- nicknamed "Ratzo Rizzo" by L.A. Times Columnist Steve Lopez -- is featured prominently in a new book that rivals Machiavelli's famous "The Prince" in its scope, while being much more relevant to the 21st Century. Written by Bruce Bueno de Mesquita and Alastair Smith "The Dictator's Handbook: Why Bad Behavior Is Almost Always Good Politics" (PublicAffairs, 352 pages, $27.99) is a good introduction to an academic discipline I'd never heard of, selectorate theory.

Rizzo, the former city manager of Bell, California, a small community south of Los Angeles, stayed in power because he had the support of the city council, which was effectively elected by 473 voters (out of 2,235 who actually voted). The 473 constituted the essential electorate.

The other two legs of this political tripod are the nominal selectorate -- everybody eligible to vote -- and the real selectorate. In the former Soviet Union, the real selectorate -- the winning coalition-- consisted of a few members of the Communist Party who chose the candidates (some would say this has been revived under the regime of Vladimir Putin, who has the power to reject potential candidates for office).

For eighteen years, the authors have been part of a team revolutionizing the study of politics by turning conventional wisdom on its head. They start from a single assertion: Leaders do whatever keeps them in power. They don't care about the "national interest"--or even their subjects--unless they have to.

Selectorate theory posits that the difference between tyrants and democrats is that there is no difference. Governments don't differ in kind but only in the number of essential supporters, or backs that need scratching. The size of this group determines almost everything about politics: what leaders can get away with, and the quality of life or misery under them. The picture the authors paint is not pretty. But it just may be the truth, which is a good starting point for anyone seeking to improve human governance.

Selectorate theory applies to Wall Street, too, where the authors (Pages 148-149 ff) describe how small coalitions are in play: "The best way to organize a business is exactly the same as the best way to organize a government: rely on a small group of essentials..."

This applies to business in general, as the recent dumping of the CEO of HP, Leo Apotheker, who walked away with a platinum parachute of more than $25 million after 11 months on the job and was replaced by billionaire Meg Whitman, formerly of CEO of eBay and a former Republican candidate for governor of California.

Rizzo was in power for 17 years, starting at $72,000 a year in 1993 and ending up in the summer of 2010 with the munificent salary of $787,000 a year in a poor, mostly Latino city. No parachute for him, he's being investigated for corruption. Rizzo and his assistant spent seven years conspiring to illegally boost their pensions, created fake contracts, secretly increased their benefits and then filed workers' compensation claims in 2010, according to a grand jury indictment unsealed March 31, 2011.
Bueno de Mesquita and Smith's "theory of political survival" provides often surprising, counterintuitive insights on issues ranging from the so-called "Arab Spring" and U.S. foreign policy to corporate governance and tax codes. Among the topics explored:

. Why countries with oil and other natural resources -- the "resource curse" -- are more likely to be autocratic, have less economic growth and more civil wars than countries without readily accessible resources. The authors explain why President Obama should focus on resource poor countries like Syria and Cuba, rather than rich ones like Libya and Venezuela.

. Why foreign aid -- from humanitarian aid and disaster relief to the funding of Pakistan to fight the Taliban and hunt down Bin Ladin -- is so ineffectual, and how -- unless we restructure the way it's given -- both aid and debt forgiveness just encourage countries to let their problems fester. Speaking of Pakistan, on Thursday, Sept. 22, Admiral Mike Mullen, chairman of the U.S. Joint Chiefs of Staff, saying that the Haqqani "militants" who attack U.S. targets in Afghanistan are a "veritable arm" of Pakistan's Inter-Services Intelligence secret police. Pakistan denied Mullen's charges on Sept. 23.

. Why natural disasters seem to disproportionately strike poorer nations, like Haiti.

. Why the easiest way to encourage political reform is to force a leader to rely on tax revenue.

The authors ask us to consider why it's important to not take a coalition's loyalty for granted -- why it's essential that you don't underpay your coalition.

The advice applies, they say, to Mafia boss "Big" Paul Castellano and an Italian of a different era, Julius Caesar. Both didn't give the coalition that brought them to power their due.

Castellano, who inherited the leadership of the Gambino crime family in 1976, neglected the Mafia's traditional businesses of prostitution, extortion and loan sharking that kept his coalition happy. Instead, he shifted the focus to racketeering and the construction business, which wasn't profitable to members of his coalition, that included John Gotti and Sammy "The Bull" Gravano. This lead to the Dec. 16, 1985 gunning down of Castellano at Sparks Steak House in Midtown Manhattan.

Similarly, Julius Caesar, they write, was not assassinated because he was a despot, as the common view holds, but because he was a reformer! Being a reformer who got ride of the policy of tax farming, which gave the job of tax collecting to persons outside government, instead rationalizing tax collection and reducing the tax bite. This was great for the common people, but not for the coalition that had put him in power -- the powerful "influentials and essentials" -- who ended up cutting him down -- literally.

The takeaway from "The Dictator's Handbook" that Castellano and Caesar both neglected: always attend to the interests of whatever group put them in power and kept them in office. Whether its the Oligarchs of Russia, who found out that crossing Vladimir Putin was a major mistake (see my review of "The Oligarchs" link: [...]) or a small coalition dictator like Egypt's Mubarak who outlived his usefulness to the Egyptian army, this rule applies.

"The Dictator's Handbook" is an important book -- a "must read" -- to anyone who wants to understand how politics really works in the political sphere and the world of business, in democracies and dictatorships alike.

"The Dictator's Handbook" is a book of political theory that aims to follow in Machiavelli's footsteps. It is provocative and has a number of useful ideas, some of which are even backed up by convincing evidence in the book (the section on foreign aid was particularly nice). But at other times, I found reading it to be frustrating.

There are a number of things to keep in mind: first of all, it is very much a work of popular fiction, written in common-sense language for the average reader to understand. Many of the assertions made would not hold water in a scholarly discussion because the definitions aren't very carefully defined, and small but vital details are glossed over.

Despite attempting to rise above the fray and present an overall picture of the political world that is more accurate than its predecessors, the book is very much a product of insular American political culture, and often propagates American political myths. For example, its poorly-argued assertion that the more democratic a society, the lower its taxes (pg. 13, "taxes tend to be low when coalitions are large"), which would be quite surprising to the Scandinavian countries, not to mention (at the other extreme) Dubai.

Another example is the assertion on pg.6 that the United States "has one of the world's biggest winning coalitions both in absolute numbers and in proportion of the electorate" (the authors define this as meaning that the American government is beholden to no less than about one-fifth of the American population). This point, which aligns nicely with American popular opinion, underpins many of the book's arguments as the actions of America are contrasted with the actions of other, less democratic countries (with smaller winning coalitions).

The authors don't acknowledge that this point has been seriously challenged, years before the publication of their book, in Martin Gilens' Oxford study from 2005, "Inequality and Democratic Responsiveness". Over a period of 21 years, Gilens analyzed the relationship between opinion polls showing what the American public supported, and the actual policy actions of the government, and came to the conclusion that "when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear virtually no relationship to the preferences of poor or middle-income Americans."

If Gilens is right, it means that the de facto size of the winning coalition in America is much smaller than Smith and de Mesquita have acknowledged it to be in their book.

If we allow for this possibility that perhaps the winning coalitions of democracies are not nearly as large as advertised, many of the examples that are used in the book have their foundations pulled out from under them.

However, I still think that the authors have probably gotten a lot of things right, even if I find the writing style a bit too patronizing and some of the given evidence built on shaky foundations.

Though fundamentally sound, this book takes a markedly simplistic approach to politics, and must therefore be read carefully and critically. With that caveat, however, it is a powerful analysis of authoritarian economics, providing us with a razor sharp tool that can cut away most of the elaborate and befuddling facades with which we normally cloak our sociopolitical institutions. Clearly, we need better ways than we currently employ of understanding ourselves, our human nature, and our human potentials; and healthier ways of constructing and operating our governments and other decision-making organizations. A Philosopher's Notebook: Tribalism and Sensuality: Antagonists--Proagonists: A study of Human Nature