(Book Notes) The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics

This book is written by Bruce Bueno de Mesquita and Alastair Smith.

(The speakers in the above podcast audio are AI-generated by NotebookLM with raw book notes as the prompt before I add the background context. It's scary how the AI podcast can sound humanlike with all the breathing and other natural sounds.)

Photo by Andrea De Santis on Unsplash

Background

Let me share with you why I found myself drawn to this fascinating book. You see, I've been grappling with a perplexing question about Indonesia's most recent former president, Joko Widodo – or "Jokowi" as we affectionately call him. I couldn't help but notice a stark contrast between his actions in the twilight of his second term and the promising beginnings of his first.

During his initial term, Jokowi was a man on a mission. He poured his energy into enhancing public infrastructure, boosting our economy, and fortifying the healthcare sector. Those were golden days, I tell you. Under Jokowi's leadership, it felt like everyone's quality of life was genuinely improving.

But then came his second term, and it was as if a switch had been flipped. To my dismay, I watched as he began to chip away at the foundations of our democracy and tighten restrictions on free speech. It was disheartening to see him seemingly focused on building a political dynasty for his family while simultaneously weakening state institutions – particularly those tasked with rooting out corruption.

I found his behavior utterly baffling. It was almost as if two different individuals had occupied the presidency – one in each term – with completely opposing characters and priorities.

Determined to make sense of this dramatic shift, I scoured the internet for answers. That's when I stumbled upon The Dictator’s Handbook by Bruce Bueno de Mesquita and Alastair Smith. Its purpose? To unravel the complex logic behind political survival and its far-reaching implications for governance.

As I delved into its pages, I felt a sense of revelation wash over me. Here, at last, were the insights I needed to understand Jokowi's perplexing behavior during his time in office. The book offered a satisfying explanation for the transformation I had observed, shedding light on the forces that shape a leader's actions as they navigate the treacherous waters of political power.

Key Takeaways

The Dictator's Handbook provides a framework for understanding the complex political dynamics that can drive dramatic shifts in a leader's behavior, as seen in the evolution of Jokowi's presidency. At the heart of this framework are the competing incentives that leaders face - between expanding their "winning coalition" to improve citizen welfare, and consolidating power to ensure their own political survival. The book suggests that leaders like Jokowi are more likely to restrict freedoms and focus on private goods when their coalition is small, whereas they tend to invest in public goods and democratic reforms when their coalition is large. However, windows of opportunity for meaningful change are often fleeting, as leaders actively resist alterations to the status quo that could threaten their grip on power. By recognizing these core dynamics, policymakers and citizens can better navigate the complex landscape of political reform and democratization.

Summary Notes

The Logic of Political Survival

The book's core message is clear: political behavior is driven by self-interest and the need to maintain power, not idealism.

It introduces three key groups:

1. "Interchangeables" (general population)

2. "Influentials" (those who actually select leaders)

3. "Essentials" (the critical supporters/winning coalition)

The authors argue that all governments, regardless of type, operate on the same principles - just with different sizes of these groups. They outline five rules for political survival:

1. Keep your winning coalition small

2. Maintain a large pool of potential supporters

3. Control the money

4. Pay just enough to keep key supporters loyal

5. Don't waste resources on public welfare at the expense of supporters

Seeing these rules, Jokowi's shift from a public goods focus to undermining democracy and building a political dynasty suddenly made sense. He wasn't a different person - he was just playing the political game to survive and thrive in power.

While it's somewhat disheartening to see how self-interest dominates, understanding these dynamics is crucial for anyone hoping to understand and navigate the political landscape effectively.

Power Transition in Politics

After delving into the power transition aspects of political dynamics, I gained crucial insights into how leaders rise, maintain, and potentially fall from power. This knowledge further illuminated Jokowi's actions.

The basics of power transition involve three key steps:

1. Remove the incumbent

2. Seize control of government apparatus

3. Form a sustainable coalition

What struck me was the emphasis on pragmatism over ethics. Political success, it seems, often requires putting strategic necessity before idealism. This explained a lot about Jokowi's later actions.

Resource control, especially financial, emerged as a critical factor. By controlling the treasury, a leader can ensure supporter loyalty.

The book also highlighted the unique challenges of democratic power:

• Large coalitions are needed but are less stable

• Competition centers on policies rather than physical resources

• Short-term appeal often trumps long-term benefits

This framework helped me understand why Jokowi might have shifted from broad public goods to more targeted benefits for his supporters. In a democracy, building and maintaining a large, stable coalition is a constant challenge.

The contrast between democratic and autocratic systems was particularly enlightening:

• Democracies rely on public goods; autocracies on private rewards

• Democratic competition is more cerebral, while autocratic is more physical

This perspective gave me a new appreciation for the complexities of political leadership, especially in a democracy like Indonesia. While some of Jokowi's actions were disappointing, I now see them as part of a larger pattern of political survival and power management.

Corporate Power Dynamics

Exploring corporate power dynamics revealed striking parallels to political systems, offering further insight into leadership behaviors like Jokowi's.

In corporations, we see three key groups:

1. Interchangeables: Millions of shareholders

2. Influentials: Major shareholders

3. Essentials: 10-15 people (senior management & board)

The core principles of power retention in this setting are eye-opening:

1. Loyalty trumps competence. Leaders often prefer loyal incompetents over competent rivals.

2. Coalition management is crucial. Keep it small and members uncertain about their position.

3. Strategic incompetence is used. Leaders may choose advisers who can't threaten their position.

Key strategies include:

• Post-power consolidation: Replace early backers with more reliable supporters

• Control mechanisms: Use rigged processes as warnings and maintain uncertainty

• Broader applications: These principles apply in various organizational contexts

This corporate lens helped me understand Jokowi's actions from a different perspective. His shift towards building a political dynasty and weakening state institutions suddenly seemed less about personal change and more about standard power retention tactics.

The similarities between corporate and political power dynamics reinforced the idea that these behaviors are less about individual leaders and more about systemic pressures and strategies for survival in leadership positions.

This framework doesn't justify disappointing actions, but it does explain them, highlighting the challenges of maintaining ethical leadership in systems that often reward self-serving behaviors.

Political Economics

The economic aspects of political power provided another crucial piece in understanding leaders' behavior, including Jokowi's transformation.

Leaders have three main ways to generate revenue:

1. Taxation

• Larger coalitions usually mean lower tax rates

• Has dual purpose: enriches supporters while burdening others

• Must balance productivity impact with supporter needs

1. Resource Extraction

• Bypasses need for citizen productivity

• Often leads to the "resource curse" - worse growth and more autocracy

• Indonesia's resource wealth likely influenced Jokowi's governance style

1. Borrowing

• Leaders prefer debt over fiscal responsibility

• Debt can constrain future challengers

• Market access determines borrowing limits

The differences between systems are telling:

Autocracies:

• Use high taxation to emphasize in/out group differences

• Employ corruption as a political tool

• Keep wealth under government control

Democracies:

• Must balance revenue needs with popular support

• Need productive citizens for tax revenue

• Face more constraints on taxation

Key insights that helped explain Jokowi's actions:

• Resource wealth often leads to worse governance

• Leaders may keep people poor to prevent coordination

• Reform typically only happens under financial pressure

This economic perspective helped me understand why Jokowi's governance changed when Indonesia faced different economic pressures and opportunities. The shift from public goods to more controlled resource distribution followed a common pattern in political economics.

Political Leadership and Resource Allocation

This section of the book really hit home in explaining Jokowi's transformation through resource allocation patterns.

Leaders have three main ways to distribute resources:

1. Public goods (infrastructure, education, healthcare)

2. Private rewards to coalition members

3. Personal projects or savings

The key to survival is balance:

• Keep coalition members happy

• Provide enough for the public to prevent revolt

• Interestingly, neither the very poor nor the privileged typically start revolutions

Democratic vs. Autocratic approaches reveal stark differences:

Democratic Systems:

• Must serve a larger population

• More likely to implement real reforms in crises

• Focus on public goods like education and healthcare

• Protect freedoms (speech, assembly, press)

Autocratic Systems:

• Focus on smaller coalition satisfaction

• Use economic bailouts for political survival

• Limit education and strategic infrastructure

• Restrict freedoms as threats to power

This framework perfectly explained Jokowi's shift:

• First term: Democratic approach with broad public goods

• Second term: More autocratic with focused benefits

• His restriction of freedoms followed classic small-coalition behavior

The economic implications were clear:

• Small coalitions use corruption to maintain power

• Large coalitions find corruption politically costly

• Small-coalition systems sacrifice long-term growth for short-term stability

This helped me understand why Jokowi's governance style changed so dramatically - it wasn't personal transformation but a shift in coalition management strategy.

Corruption in Political Systems

This section was particularly enlightening about why leaders like Jokowi might shift their approach to corruption over time.

The harsh reality of power:

• Successful leaders often use repression and eliminate rivals

• Those unwilling to take harsh actions get replaced

• "Be corrupt" is seen as practical advice for survival

Coalition size dramatically affects corruption patterns:

Small Coalitions (like Jokowi's later term):

• Higher proportion of corruption relative to GDP

• Big rewards for key backers

• More obvious corruption (bribes, favoritism)

• Leaders keep significant discretionary funds

Large Coalitions (like Jokowi's early term):

• Lower proportional corruption but possibly higher total revenue

• Benefits spread thinner across more supporters

• Corruption hidden in policy decisions

• "Pork barrel" projects common

The corporate world shows similar patterns:

• Mirrors small-coalition systems

• Leadership survival depends on rewarding key supporters

• Financial distress increases likelihood of fraud

Why traditional anti-corruption efforts often fail:

• New laws can become tools for enforcing discipline

• Reformers and whistleblowers get targeted

• Real change requires expanding coalition size

This framework explained Jokowi's trajectory perfectly:

• Early term: Broader coalition, less obvious corruption

• Later term: Smaller coalition, more direct corruption

• Weakening anti-corruption institutions followed this pattern

The key insight: Corruption isn't just about morality - it's a structural tool for political survival. This doesn't justify corruption but explains why even initially reformist leaders might shift their approach over time.

Foreign Aid and International Politics

This section revealed how international politics and aid can influence domestic leadership behavior, offering another perspective on Jokowi's transformation.

The Democratic Foreign Policy Paradox:

• Leaders must "do right" at home but often exploit foreign nations

• Short election cycles encourage short-term thinking

• Focus on next election over long-term outcomes

Aid as a Political Tool:

• Primary goal: Improve donor country's welfare

• Not mainly for poverty reduction

• Used to buy policy concessions

How Aid Affects Recipients:

• Often misappropriated

• Helps leaders maintain power

• Enables restriction of freedoms

• Donors overlook corruption when seeking favors

Key Differences in Recipients:

• Democracies: Expensive to influence, must compensate many

• Autocracies: Cheaper to influence, smaller coalition to satisfy

This helped explain Indonesia's situation:

• Foreign aid and investment influenced governance

• International relationships affected domestic policies

• Pressure for policy concessions might have encouraged Jokowi's shift

Problems with Aid Implementation:

• Bureaucracy hinders economic activity

• Recipients convert aid to preferred rewards

• Can actually incentivize maintaining problems

• Suggestion: Use escrow funds until objectives met

Military Interventions:

• Often reduce democracy in target nations

• Easier to deal with autocrats for policy compliance

This framework shows how international pressures and aid dynamics might have influenced Jokowi's governance shift from democratic ideals to more autocratic practices.

Revolutionary Dynamics and Political Survival

Triggers of Revolution

1. Tipping Points

   • Requirements for rebellion:

     • Expectation of sufficiently bad future

     • Belief in potential success

     • Promise of better life

   • Common catalysts:

     • Natural disasters

     • Succession crises

     • Economic downturns

     • Rigged elections

2. Revolutionary Promises

   • Always begin with democratic reform promises

   • Aim to mobilize masses

   • Often lead to petty dictatorships once successful

   • People hope for:

     • Enlarged winning coalition

     • Inclusion in new power structure

Leadership Responses to Revolutionary Threats

1. Two Main Approaches

   • Increase democracy:

     • Improve conditions to prevent revolt

   • Increase dictatorship:

     • Make rebellion chances minimal

     • Intensify oppression

2. Suppression Tactics

   • Prevent free assembly

   • Require loyal supporters for dirty work

   • "Prudent dictators nip rebellion in the bud"

   • Only the ruthless survive as dictators

Democratic vs. Autocratic Protest Dynamics

1. Democratic Protests

   • Relatively cheap and easy

   • Protected right to assemble

   • Aimed at policy changes

   • Leaders respond with concessions

2. Autocratic Protests

   • Aimed at systemic change

   • Higher risks and costs

   • Success depends on coalition support failure

   • Often triggered by resource limitations

Economic Factors in Political Change

1. Resource Dependence

   • Tax-dependent regimes are less oppressive

   • Natural resources enable greater oppression

   • Economic crises are political crises for autocrats

2. Public Goods Provision

   • Determines people's desire to rebel

   • Freedom determines ability to act on desires

   • Economic necessity may force democratization

Natural Disasters and Political Survival

1. Impact on Different Regimes

   • Democracies:

     • Leaders removed for high death tolls

   • Autocracies:

     • Leaders benefit from high casualties

     • Dead citizens can't protest

   • Refugee camps inadvertently facilitate organizing

2. Strategic Responses

   • Autocrats more concerned about urban disasters

   • Selective assistance based on threat level

   • May exploit disasters for international aid

Conditions for Successful Democratization

1. Economic Factors

   • Limited natural resources often favor democracy

   • Need for productive citizens encourages freedom

2. International Support

   • Debt forgiveness tied to actual reforms

   • Aid conditional on genuine political change

   • Freedom expansion signals potential democratization

War and Political Systems

Fundamental Differences in War Approach

1. Decision to Fight

   • Democratic leaders:

     • Fight when victory is nearly certain

     • Seek peaceful resolutions when possible

     • Highly sensitive to war outcomes

   • Autocratic leaders:

     • Will fight despite unfavorable odds

     • Less affected by military defeats

     • Quit easily if initial effort fails

2. Military Functions

   • Autocracies:

     • Military serves dual role: domestic control and foreign threats

     • Elite units primarily for crushing internal opposition

   • Democracies:

     • Focus primarily on external threats

     • Invest in better training and equipment

Treatment of Soldiers

1. Value of Military Lives

   • Democratic approach:

     • Soldiers are politically important

     • Emphasis on minimizing casualties

     • Better equipment to leverage impact

   • Autocratic approach:

     • Foot soldiers politically insignificant

     • Less concern for troop protection

     • Resources not "squandered" on battlefield

2. Impact on Strategy

   • Democrats:

     • May lose power even in victory if casualties are high

     • Use technology to minimize risk

   • Autocrats:

     • Can survive high casualties

     • Prioritize keeping power over military success

War Objectives and Outcomes

1. Motivations

   • Democrats:

     • Fight for policy concessions

     • Engage in far-flung conflicts

     • More likely to be "bullies" to weaker states

   • Autocrats:

     • Fight for land, slaves, and treasure

     • Prioritize job security over conquest

2. Post-War Behavior

   • Democrats:

     • Enforce policy settlements

     • Impose puppet regimes

     • Maintain occupation

   • Autocrats:

     • Take valuable resources and leave

     • Less concerned with policy enforcement

Democratic vs. Democratic Conflict

1. Interaction Dynamics

   • Rarely fight each other

   • Larger democracies may target smaller ones

   • Crucial factor: certainty of victory

2. Puppet Regime Installation

   • Democrats often install puppet leaders

   • Reduce coalition size in conquered states

   • Makes policy compliance cheaper and easier

Strategic Considerations

1. Escalation Patterns

   • Democrats:

     • Gradual escalation

     • Willing to negotiate if victory uncertain

   • Autocrats:

     • More willing to take risks

     • Less strategic in approach

2. Resource Allocation

   • Democrats:

     • Invest heavily if fighting proves necessary

   • Autocrats:

     • Limit resource use to preserve private rewards for supporters

Conclusion

Core Concepts

1. Political dynamics revolve around three key groups:

   • Interchangeables (general population)

   • Influentials (those with some political voice)

   • Essentials (key supporters needed for leadership)

2. Coalition size fundamentally shapes governance:

   • Small coalitions foster autocratic, private-goods focused rule

   • Large coalitions encourage democratic, public-goods oriented governance

Leadership Dynamics

1. Leaders resist change when:

   • It threatens their power or resources

   • The status quo benefits their essential supporters

2. Change becomes possible during specific windows:

   • Economic crises when leaders lack funds to buy loyalty

   • Transitions of power (new leaders or dying incumbents)

   • When coalition members fear purges

Reform Mechanisms

1. Internal factors:

   • Technology (internet, cell phones) enables coordination

   • Economic strain can force liberalization

   • Tourism-dependent economies may be more susceptible to reform

2. External interventions:

   • Most effective during leadership transitions

   • Should focus on expanding coalition size

   • Can leverage economic incentives

Corporate Parallels

1. Similar dynamics apply to business governance:

   • Small coalitions (boards) may prioritize private benefits

   • Larger coalitions (shareholders) tend to improve corporate responsibility

   • Social networking can mobilize corporate change

Practical Implications

1. For promoting democracy:

   • Elections should follow expanded freedom, not precede it

   • Economic success may delay but not replace democratization

   • External pressure works best when leaders are vulnerable

2. Policy recommendations:

   • Use escrow accounts for conditional aid

   • Offer amnesty to encourage peaceful transitions

   • Focus on expanding coalition sizes

Challenges and Contradictions

1. Self-interest often trumps idealism:

   • Democracies may prefer cooperative dictators to hostile democracies

   • People support freedom abroad only when it aligns with their interests

2. Reform obstacles:

   • Gerrymandering reduces accountability

   • Non-citizen immigrants expand disenfranchised populations

Final Observations

1. All small-coalition systems eventually face efficiency crises

2. Change opportunities arise when bad governance becomes unsustainable

3. Targeted sanctions on leaders are more effective than broad penalties on countries