#DevTalks: Political Favoritism and Regime Stability / Why Bad Policy is Almost Always Good Politics

DISCLAIMER: This webinar transcript was loosely edited and there may be inaccuracies. 

(José) Hello and welcome to Dev talks. I am José Morales-Arilla I am a post-doctoral fellow at the politics department in Princeton University, and a Research Fellow at the Growth Lab here at Harvard, and it is my great pleasure to be welcoming Professors Bruce Bueno de Mesquita and Alastair Smith, Bernhardt from NYU for a session that will largely revolve around their book, The Dictators Handbook Why, Bad Behavior is Almost Always Good Politics. So without further ado,professor Bueno de Mesquita.

(Bruce) It is it really a pleasure to be here. I appreciate you all coming out.

I've got about ten, fifteen minutes, so i'm going to be cutting a lot of corners. I'm going to quickly introduce you to selector theory, which we developed with some colleagues. It's a game theoretic model about leaders survival. And we're going to use it to talk about why bad behavior is often good politics, and demonstrate some applications of it to real-world problems.

In the selector theory, we think of all organizations, not just governments, we've also studied corporations, and so forth. All organizations are set up through a set of nested groups as opposed to a government is democratic or autocratic and then we have arguments on what does that mean.

A nominal selectorate, people who have at least a legal say in choosing leaders, shareholders get to vote, and we, as citizens, get to vote. And in Saudi Arabia the royal family has a say, and so on a real select We won't worry about today, the winning coalition, which is the portion of the selectorate, whose support is essential to keep a leader in power, and it can be made up of blocks which in questions i'm happy to talk about and I'm sure Alastair is, but otherwise we won't touch on it today.

The basic idea is that a leader always has rivals who are trying to take the leader's job. They may be ordinary challengers. They may be revolutionaries, coup plotters, whatever. So, in order to stay in power, you have to pay your winning coalition just enough so that they aren't better off defecting to arrival.

In this theory, leaders do in this version of it three things: they raise revenue through, for example, taxation, and they spend money on public goods to benefit everybody, and private goods, such as corruption opportunities to benefit members of the winning coalition and any money that they don't have to spend in equilibrium, to fend off the challenger and keep their coalition, succeed in keeping their coalition Loyal is at their discretion they might choose to send, spend it on pet projects, civic-minded projects, or they might prefer to have a swiss bank account.

Rivals make the best offer that they possibly can, which means that they make a very big offer today, Go, rob the palace blind, but they have the problem that they can't credibly commit to keep you in their winning coalition tomorrow. They want to sort out the coalition to find people who have affinity for them have some attachment to them, so that they'll be to to keep the people who are thinking about defecting from the existing winning coalition to a to a challenger.

I'll have to think about the lump sum payment, but they also have to think about the flow two hundred and fifty, and they're confident about the lump sum today, but the flow is problematic. It's risky. And for the um incumbent once. So the coalition gets reshuffled Gradually people come in and out of it. They're brought in and out.

You begin to learn who has higher affinity for you, and who has lower affinity, and people who have higher affinity remain in the coalition people of lower affinity get booted out. And so you have an expectation that you will, as you, as you survive these shuffles that you will, with higher probability, continue to get the flow; whereas, if you are distrusted, if you are a low affinity type, if the incumbent thinks that you are not reliable. You get ousted, and that's why bulogs exist as a good place to send you off to, so it's it's costly not to be trusted. That's a very, very, very brief summary of about thirty years of work.

The theory leads an equilibrium to lots of predictions about behavior. Some of the important ones are summarized here. The thing to be conscious of is that the coalition gets bigger, we might say more democratic as you depend on more people, You shift to more public goods, because private goods get to be expensive, as you have to give them to more and more people. So public goods go up. Private goods go down. The longer a leader is in office, the less they spend on the coalition, and as the coalition gets bigger, the more of the revenue that has to be spent in equilibrium to keep the coalition loyal, So there's less discretionary money, less opportunity for kleptocracy for example.

The leaders welfare strictly decreasing as the coalition gets bigger. Those who are disenfranchised, and those who are in the selectorate, their welfare restrictions

increasing as the coalition gets bigger the welfare of the coalition. We will look at a figure. It's more complex. It looks like the Nike swish curve, and we'll talk a little bit about that.

Tax rates decreases, the coalition gets bigger chances of foreign aid decrease, and the amount of foreign aid you get if you get aid increases. That's a very quick summary of a lot of stuff.

The longer a leader is in office. These are quite new results. It turns out there is a life cycle effect for leaders within the selectorate framework. It turns out that the longer you're in office, the less you have. So now the people in your coalition have survived the reshuffles, so they know their probability of surviving is going up. It's increased. They're less likely to get tossed out in the future, so they can be bought more cheaply, fewer public goods, a higher ratio of private public goods, fewer freedoms. But there are fewer coups, fewer revolutions, and reduced leader change. The longer you're in office, the less likely you are to be ousted except by mortality. So the welfare of the coalition, as

I see it looks like this: Nike switch the welfare of outsiders just rising as the coalition gets bigger. Two things are happening as the coalition gets larger that leads to the drop, it's an asymmetric drop and then increase. The first thing that happens is you're sharing the private goods with more people. So you're getting fewer private goods. The second thing that's happening is as the coalition gets bigger to defeat the Challenger, you have to spend more of the revenue. So the pie that is being spent on public and private goods is expanding. So, even though the proportion of private goods is going down. Of course the total may be going up, and then eventually that curve turns up. And if you look at that red dotted line is a very important cut point here, the local maximum when the coalition is tiny, is an expectation equal to a point.

We have it at Point eight, but that's just an example where when the coalition is quite large. Below that cut point is the world of revolutions and coups. If you get past that cut point the only way to improve the welfare of coalition members is to increase accountability, Expand the coalition more. No country, by our estimation that has passed that cut point has ever had a successful core revolution.

Okay. So we wanted to do some quick and dirty easy tests on some of this. So we're interested in two elements here, lots of control variables that I've shortened this or they're not listed. And there are year and country fixed effects in these regressions, and they're very simple regressions. So we are interested in the effect that the size of the coalition has on total rewards, public goods and private goods, and the theory makes predictions about that. And we're also interested in how longevity and office affects those things.

So, as you can see, bigger coalitions means more total rewards, more public goods, exactly as the theory predicts, and fewer private goods as a proportion of spending also, as the theory predicts. But the longer you're in office, the fewer total rewards you provide the fewer public goods, and the more the ratio. So that's as predicted.

We look at some other effects: Freedom of assembly, an indicator of the ability of people to coordinate that goes down the longer leaders or an office. But it goes up

And the bigger the coalition press restrictions. You get more press restrictions The longer a leader is in office, and fewer as the coalition gets bigger. I should know, by the way, the composition effects run against these results. Right leaders, for example, who do better survive longer one hundred and fifty or not, and torture Ah, torture goes up the longer you've been in office. Ah! And it goes down the bigger the coalition! It's very unpleasant.

We have a conjecture. We have not proven this yet. Everything else We have proofs for that I've said so far. The conjecture which we think we will prove soon is that as the longer you're in office two Ah, the more public goods. Ah! The the fewer public goods are producing. Public goods are going down. Ah! The more the more that corruption is going up, and the impact on the economy of fewer public goods, less infrastructure, less freedoms to innovate, and so forth.

And more corruption is that growth goes down, and we see that the longer you've been in office, the lower the growth rate composition effects running exactly in the opposite direction. Here, size of the coalition does not affect the growth rate significantly. What it does affect is the variance in the growth rate. So in small coalition regimes, some of which produce hot high economic growth is very high variance, especially when you change leaders. Very big swings in large coalition regimes. There's very little variance in the growth rate. As you change leaders.

It's just this steady slog. Okay.

So when governance it depends on a large coalition, Then societies are wealthier in terms of per capita income. People are healthier. They live longer,lower infant mortality, so on, and they are a lot freer their society, their governance is more transparent. We know what the government is doing, and they turn out to be better places to live, which means that they attract a lot of immigrants, and they have relatively low emigration.

And, in fact empirically, this is as simple. Of course we do much more sophisticated things in the academic work, but as just a simple portrayal as possible. This is Ah, the V dam measure of public goods looking at nineteen, seventy to twenty, twenty, one, and we are looking at the size of the winning coalition,as we estimate it, and you can see It's a strong, positive effect. More public goods with bigger coalitions when the coalition is small. On the other hand, we're looking at corruption. Corruption is really high. When the coalition is small, it's almost a perfect fit here, and corruption is plummeting, as the coalition gets bigger.

The few exceptions like these guys are oil or petrol states. They don't need to engage in corruption. They got tons of money around.

So we wanted to illustrate how this can be used. Ah, practically so. We want to give some examples from Ah Ukraine and from Ah, the Arab spring, all of the results. I'm. Going to show you are based on the model being one projecting the the variable of interest, the dependent variable two years, one to two years into the future. So these are all. When I say two thousand. Here's what will happen in two thousand and eleven. It's based on data from two thousand and nine predicting forward.

So if you pay your coalition enough, a little bit more theory, you get stability. If you pay too little below that swish curve, and then you get instability, and if you pay too much it's a little bit more complicated. So people like to get paid too much, so that induces some loyalty. But if you pay too much, they have to wonder. Why are you doing that? One possibility is uncertainty. So then, you should be a good Bayesian you should be updating, and that overpayment should be dropping if it's not dropping one hundred and fifty and you can anticipate a purge is coming. If a purge is coming, the leader can anticipate that people are going to plot a coup to avoid the purge. Ok. So here we looked at one hundred and fifty,

the political stability in Ukraine's neighborhood, first in two thousand and nineteen. The next slide will be in two thousand and twenty one, and we see there's only one country that was below the curve in two thousand and nineteen. This is the year that Zelensky came to power. Only Ukraine is below, and you see the other thing it's interesting is how efficient governments are. The curve is exactly the incumbency constraint. It's paying just enough to defeat the best offer that arrival can make. So everybody else is just about perfectly on the curve. Ukraine below, that tells us Ukraine was looking at a period of change.

We go to two thousand twenty one. I want you to before we do that, to remember that Belarus is on the curve in two thousand and nineteen. And now we're looking at two thousand and twenty. One. Belarus is below the curve in trouble. Remember, this is projected from two thousand and nineteen data. Ah! And Belarus, in fact, was in trouble in two thousand and twenty one. Ukraine is in trouble, and we see that Russia is above the curve and if you go back to the previous slide you'll remember they were on the curve, so they've gone up. They're paying too much, not out of uncertainty,but Putin has chosen to pay too much, paying too much. There's a precursor to purges it. It could be a precursor to expanding the coalition, but then there's less money for him and his cronies that would seem unlikely.

So i'm going to take too long. So i'm going to flash with These, These are details of changes in Ukraine as Rock went on Arab spring.

Oh, there we go, and you can see in the circled area that Yemen is at the Peak in terms of revolutionary threat. Right behind Yemen is Egypt, and so on. You can see, for example, Saudi Arabia in two thousand and eleven projected not to have any problems.f we

repeat this for the risk of coup, we see that in two thousand and eleven Egypt is now at the peak it's way above the global average risk of such events, Followed by Tunisia, and so on. When I hear when Alice hears that the fellow who, self-immolated in Tunisia, is the cause of the Arab spring. We think well. But back two years earlier the data we're telling us that trouble was coming, and if we look at the two thousand and thirteen fourteen, we see that this is the period where more seek it's overthrown, we see again, Egypt has a big risk, and we jump ahead to two thousand and twenty. We see that Sudan is at the top, and Sudan had a coup in two thousand and twenty Again, Remembering this, is projected two years in fans so to wrap up when the coalition is large. Then good policy and

low-private goods production improves survival. If leaders engage in corruption that hurts their prospects. On the other hand, when the coalition is small,good policy is bad politics, it hurts political survival. Corruption is good for political survival when you have a small winning coalition. Ah! The best survival prospects arise when the ratio of the coalition to the selectorate is small, so the costs and the risks of defection are high. So to wrap up institutions.

In this view of the world shape, policy, leader, survival is a function of the ratio of coalition is electorate size, and of affinity leaders anticipate threats, so it's much more important to to study it. When you are an instability there expectation about the coming of threats rather than the realization of threats, because Real realize that it means a mistake they should have when they anticipate. They take counter moves to prevent the threat from being realized. They engage in suppression, extralegal killing, ah, or policy changes which induce institutional change in equilibrium, such as liberalization or autocratization. Sorry I read a little over.

Thank you so much for the say Two or four on on the logic of selector theory. I mean I read the handbooks, the the Dictator's Handbook not long ago, and I was, you know I just loved it because it gave me straight answers for some of the most frustrating political events in my life. Right like it. It helped me understand why the illness of which I was managed with such a capacity and right like, why, why that was so important for the survival of the regime beyond the and the passing of of him. One hundred,

But in the spirit of this question let me pose a couple of questions right like one of the things that I noticed that the theory kind of tells you what happens at different levels of the size of the winning coalition. But it doesn't emphasize enough how the size of the winning coalition can change two.

The very first question is like, What does electorate theory tell us about the process of democratization? Right? Ah! And and a How do winning coalitions grow when leaders incentives are to shrink them, and how can they interchangeable A. What can they do to change this equilibrium into a more democratic one and as Bruce was alluding to some of the things we've been doing at the end is to think about. When is it that leaders are not providing the policies that we would anticipate? They would provide. Given their institutional settings, how healthy they are, how long they've been in tenure. The economic circumstances where they're getting their revenue from.

So we've been looking in terms of trying to make an assessment about how institutions are changing, looking at where the leaders are over providing, and where the leaders are under providing.

So, for example, Bruce was talking a little bit about Russia. There it wasn't for us just the key that the Russian leadership is providing too many rewards. We've actually been looking in the sense of how are they over providing those rewards? And the over provision is that there's a lot more corruption and private goods rewards that we would anticipate giving the institutions that Putin has, and given how long he's been in office and the economic conditions and stuff. And so for that is the key as to what the future trajectory of institutions are going to be so, leaders that are over providing freedoms of assembly, for example, providing freedom of assembly is terrible for your institutions in the sense that you might start democratizing. There's an incentive that it's going to be much harder to resist the people if you make it too easy for the people to come onto the streets. And so one logical consequence is, you're already providing the goods that reward a large coalition. So one easy way to get this is equilibrium. To go away is to actually have more inclusive political institutions. So this is not a way we've been thinking about trying to bring a dynamic element to what.

For twenty five years we studied a very static theory.It's super interesting. Another question has to do with these, you know. If you were to steal the core message of the theory. One could argue that it is like more. Democracy is good because it leads to more public goods, but two hundred and fifty.

Well, the high versus not. But if you leave it for citizens, Yeah, it's terrible for you. But then on that exact point, right like when we think of the cases of the developmental successes of the station tigers, right like these are countries that started with very limited coalitions of Forum, and very dictatorial, and not only were able to to develop, but many of them. I also got to democratize right again, and people argue for them as as one

Case studies of democratic, a modernization theory, right? You developers, and then you, you you the mocker guys.

It's kind of hard for me to think of these cases as just like, you know, exceptional quirks, and you know it's in the regression. It's supposed to be different.

The institutional context that can also lead to development. Right. So how could we think about these cases in the context of electorate theory? So I want to go back to comment on this slide. That's so up there about the realization of one

Destabilizing events versus their anticipation. So if you look at the Korean case, for example,there was concern about military coups when it was a military regime. The

I think these big changes are kind of haphazard because a coup hasn't happened. A revolution hasn't happened. But leaders are researching this now. Leaders. If they're rational, spend a lot of their time anticipating. Am I getting into trouble? And what adjustments do I have to make if i'm getting into trouble, And it turns out that even though leaders would always prefer a smaller winning coalition, there are conditions within this theory under which, when I anticipate, for example, a mass uprising may be better off expanding the winning coalition, which means producing more public goods, all of which is going to support having a more successful society, two to buy off that risk and preserve myself in power rather than try to, and I try to crush it as well. It depends upon what the details of the case are um, but there are conditions under which it's in my interest to expand the coalition because it keeps me in power. J. J. Rawlings in Ghana is the classic example of this. Um. There are other cases where it's in my interest. There's this wave of paper in two thousand and nine shows where the cut points are.

For this, shrinking the coalition is what's in my interest. And so those places Don't become tigers. They become smaller coalition, more autocratic places. One of the factors that affects this is the conjunction of how long a leader's been in office, and how healthy the leader is so when a leader is believed, for example, to be dying so they can't be counted on to provide payments in the future because they're going to be dead, so that changes their equilibrium behavior because they want to hang on till they're dead, and that often leads to liberalization.

So the theory predicts when you will get the tigers, and when you won't, remembering as well that the theory predicts with regard to growth specifically, that when the coalition is smaller, there's more uncertainty and more uncertainty breeds its own problems. The variance in growth is much, much higher in small coalition regimes fantastic, and the the book also seems to my my recollection of the of the argument itself is that you know we're thinking about strategic leaders that want to stay in power, no matter what right and and and that that that kind of logic might be the most certain and most accurate in most cases.

But it also leads very little room for leadership, right like and positive leadership in terms of leaders that want to expand. They want to democratize their country, and you know it. That might be most accurate in most settings. But we're in the Kennedy School, and you know many people here have been inspired by. You know, cases of people that had the chance to, you know, be narrow minded, take over almost power all the power for for themselves but

And actually decided to take a different avenue and confront the probably the Radicals that took them to power, and and and actually allow for the opening of the political system. So, on the one hand, it's like it's like a two-fold question right like on the one hand, What's the role of leadership in selector theory, if any but second one hundred and fifty

One can selector theory, how can selector theory help inform the decisions and the strategies of democratizing leaders in hard settings in dictatorial settings. The fundamental assumption we make is that leaders want to stay in power, and we just make the assumption two hundred and fifty.

You want to be in power, but you can also motivate that by the fact that if you are not in power you cannot implement the policies that you want to implement. So we're not saying that leaders have no interest in policy. They may actually want to do certain things, but you can't do those if you don't keep your job.

And so instrumentally, we're going to work with that assumption. There's a great deal of discretion that leaders have particularly in small coalition systems. So you know, I know It's very popular at the moment to think China is this wonderful country, and that we should all be dictators because we could get ten percent economic growth.

I just like to point out that a hundred years ago China had about the same Gdp as the United States. So yes, it can be higher. But it's also. There's those years in the fifty S. And sixty S. When they were doing so massively worse. And so there's high variance. But the the There's a big discretion here in what you want to do.

So Deng wants to grow the economy and produces policies that keep him in power and allow him to grow. The economy now before him chose policies that kept him in power, and also impoverished the country and killed. I I don't even want to guess how many tens of millions of people, but many millions of people died. So there's a lot of discretion that leaders have. What is very rare is to see leaders take actions that are going to get them in political trouble, and it's going to cost them their job without them being the position that they really they're going to lose anyway.

So I mean, I think of very, very few leaders who act against their own political interests.

Let me illustrate this with a real world example of an unusual case. Somebody who ruled two countries simultaneously.

Ah, Leopold Ii. Was King of Belgium from eighteen, sixty, nine, till he died in nineteen O. Nine, and he was the leader of the Congo Free State. Any place it's called Free, or called Democratic, or called peoples Isn't um In any event. Ah!

In Belgium, even today he is revered, he is among European leaders. He depended on a relatively large coalition. It was a multiparty system. It was not a super strong constitutional monarchy, but not a really weak monarchy.

Leopold promoted the first laws in Europe, protecting women's rights, banning child labor, producing free trade, and so forth.

He depends on a relatively large coalition in the Congo. He depended on the Force Public as two hundred Europeans, and he did not have the constraint of a large coalition, and his rule of governance was a small Coalition leader.

I want you to produce first. It was from ah Ivory, later from Rubber X. Amount of money for me, not for Belgium. This was his money, not Belgium's money. I want you to produce X amount for me. How you get it as your business, you know. Essentially they were tax farmers. You go do whatever you want.

They cut off millions of hands. They murdered millions of people, and he became fabulously wealthy. So there was a place for leadership. There was variance in leaders,but the institutions are much more constraining. Same guy, same culture, same personal history, By the way, mobile Ducasseco, in case you think it was colonialism. Racism governed the Congo in exactly the same way as Leopold did in theory. We recognize that among small coalition leaders there can be three.

So there's a big pool of discretionary money, and the leaders can be in what we call our Hall of Fame. H. A. You Well, they're stealing tons of money um mobile do with such a person. Marcos was such a brilliant plenty. There could be plenty of such people like Kim Jong-un, certainly one or they could be civic minded, and among the civic-minded they come in two flavors. They have good ideas about how to promote social success.

Lee Kwanhad good ideas. Dunk, chopping had good ideas, and they could have really bad ideas for me, and Kruma had bad ideas. Ah, nasa don't have bad ideas, and we tend, then selectively after the fact, to look at the ones who did well and say, Oh, it's It's not so bad, and we don't' look at all these other guys who didn't do so well.

That's super clarifying. Then I want to to shift gears to the role of

international relations in selectoral theory right like, on, On the one hand, one of the theories that has been presented on why some of the is Asian tigers pursued developmental policies was because they were facing foreign threats, right like Taiwan from China, South Korea, from North Korea. But at the same time something that you do discuss in the book at some length is at this point.

That debt forgiveness is one likely counterproductive, because you're removing the consequences of being extracted right like in a way. So so a I wanted to to to, perhaps give you the opportunity to discuss more about the role of international relations in electoral theory, and also more precisely like what's the role of economic sanctions or other economic, one hundred and fifty tools of foreign pressure on on on dictatorships in terms of like driver of the potential expansion of winning coalitions, I mean, i'm always shocked about debt.

I mean, if you're a leader and you get to borrow It's like getting a credit card going to a nightclub. You can run up the biggest bill you like, and only if you're extremely lucky you're going to be in power when that credit card bill has to be paid, is actually shocking to me that people aren't borrowing even more money

right? It's only a very lucky leader who's going to come around for the consequences of this. And so this is the problem is that leaders have incentives to borrow because they can, and it and it's somebody else's problem. Um! And so we're very much of the opinion that the only time we always think about debt problems as not financial problems, but political problems, because in order to finance or get the economy going enough to make debt payments, you have to implement more liberal policies. You have to let people talk to each other. You have to root out corruption. These are all things in ah, an autocratic small coalition system that are very bad for your survival in power.

And so people will, you know, swear blind that they'll reform after you've given them some more money to pay off their debt. But the moment, of course you've paid off the debt they can pay off who they need to, and the problem goes away. And why would you then implement reforms that are going to make it harder for you to stay in power?

So we're very killjoys. Is one of the nicer things we've been killed at times. You know. It's the one time leaders are on the hook when they desperately need money.

If we had a policy proposal, one of the things we would say is, you know. So give me the reform, and then we'll give you the money. We're not going to give you the reform on the problem. We're not going to give you the money on a promise of a reform would be one of ours sort of recurring themes we have. If you can't pay your coalition, you're going to be in trouble.

Going to have to change institutions. You're going to have to change policies that put you in political jeopardy. If you have the money to pay off supporters, then why worry

fantastic. So I have a couple more questions, and maybe we'll get back to those towards the end. But I wanted to give the opportunity to the audience, both on zoom and and here in person to to ask a few questions. So if anyone has a question, we're happy to share the microphone with you.

Hi, Thank you so much.One question that I had with for this framework is, how do you think an exogenous shock of something like a windfall to make up for current government services would influence that provision long-term for different types of winning collisions. Say that you know outside organization starts providing transfers for low-income peoples in a country.

Would that incentivize countries with low? It was small minimum collisions to stop providing those services, and instead divert that revenue towards our collision? Or would that eventually have a different type of impact?

The short answer is, it will disincentivize the government from providing better policy. So governments provide small coalition governmentsprovide some quantity of public goods, because they need people to be capable enough to produce, so that they can keep the leadership and their coalition in the money and in office.

So if you have it on now on the nature of the windfall, if you have a windfall in the Your. A small coalition regime, you have a windfall in in the form, for example, of the discovery of natural resource.

So the pressures in that case are the resource. Curse. It is to provide less. If you have a large coalition exactly because you're past this cut point, you can't provide less. So in this understanding of the discovery of natural resource models. For example, once you pass this point, you're just going to produce more public goods, because

And you have to. Otherwise you're going to have people oust you. So it's about. What do I have to do to in anticipation to prevent the people from rising up, or the coalition from rising up one hundred and fifty.

So there are some shocks, some exogenous shocks that work the other way. I mentioned briefly, and we've done papers on this health shocks are kept secret to the extent that you can, they are more likely to be discovered by people in the winning coalition than by the general society.

Health shocks from the perspective of the coalition a signal that that flow which was important in their calculations about staying loyal is going to dry up so to offset that threat,

I expand the coalition. So there are shocks that will lead me to buy off the threat positively, and an awful lot of shocks that lead me to buy it off negatively

Thank you. I'm extrapolating the legal term to mean parties in power in a functioning democracy.

I think that's a very reasonable way to go. We we've just from A. Because we game theorists, so we we really like to keep the number of actors nice and small. We have a leader.

But I don't have a problem with interpreting. Is this Ah! In a broader sense, that there might be two very important positions, or that at some extent political parties may be more of an actor. I don't I don't have a problem with that interpretation as a game theorist. I'm never going to model.

They're just adding, that's just making my life harder. Sorry with my question that you know for me proper nouns are Alpha leader and people's one through, and I mean that that's my idea of how we should be proper now, and research but keeping the assumption oh, like I come from India, and we have seen that large coalitions are actually unstable,

Because there are too many competing demands that the Government is not able to satisfy. So where is that tipping point where a large coalition goes from being welfare oriented and stable to unstable and just generally a failure. Oh, you have to tell me, Okay, Bruce is an Indian. Bruce is actually an area specialist in Indian politics. He wrote his dissertation. I know it was many, many, many centuries ago, but he wrote,so we we need to keep So, if you remember, in the first slide I had this little thing blocks, and I said, Well, i'm going to talk about them unless you get pressed. So you just press, although you may not realize it. So when in a nominally democratic society, when people vote as in blocks.

So the the true size of the winning coalition is smaller than the apparent size of the winning coalition, because there is a block leader, an entrepreneur, a village head, that whatever who controls have a block votes, India is a much smaller winning coalition system. Then the electoral structure might lead one to infer. It's also why it's more corrupt than one might infer.

Block Voting does a lot of things. It also goes to your earlier question. We've written several papers on on block formation, and so forth.

So when you move to a world in which there are are voting blocks, so now you have to move to a world where leaders, instead of doing revenue applicants in private goods, they do revenue publicly private goods and club goods.

The club goods are things that are public for those in the in the block, and ah! Those not in the block are excluded from them. Ah, so so it distorts the economy in more complex ways than that. When there aren't blocks, and India is a classic block voting society, so it just muddies the water. The math is just so much harder, so much more complicated. One hundred and fifty so cast could be a block. As I mentioned, I started my career as an Indian, as my first two books were in India, and I pretty much got driven out of Indian studies by suggesting that was not nearly as important a variable as Indianists thought it was because there are many other forms of blocks. Ah! And in particular, when you get down to the local level of elections. Ah! In any given electoral district the competing parties have generally worked out, which is going to be the dominant cast. And so all the candidates from the different parties are from the same cast. So it's irrelevant. Then what's relevant? Are other considerations, occupation which is correlated with cast, but not a variety of other sorts of things which makes it complicated.

Thank you very much. My name is Teres I'm. From the Drc. So thank you also for mentioning King Leopold and Mobutu, and the interesting transitions I'd be very interested to know from you, if you have from your studies um any insights on the reasons why leaders do leave power. So when we look at the African continent. We have cases like Ghana Senegal, recently in Kenya, where we have transitions of power according to the legal framework, but we also have where one it just doesn't seem to want to end. So what what motivates certain leaders to actually transferring with them, carrying along with them? Is there a coexistence of coalitions that you know, provide some kind of protection for these former leaders. I'd be very interested to know if you have any.

With regard to term limits. Term limits are endogenous. They are strategic consequences of the institutional structure in a large coalition system. They are a way to ensure that other people can get rid of you and come in and smaller coalition systems. So among the work that the two of us have done on blocks is that even in a one party state with a strong leader.

Ah! The leader has incentives to create factions within the party, because essentially people will free ride if there are no rewards for making effort on the leader's behalf. If there's no faction competing with another faction, there's no reason, you know, you get the collective action problem, a consequence of that factionalization is the emergence of rival leaders

Who then try to endogenize firm limits? Do leaders leave office absent, and institutional structure to lead them to leave office. I supervised a a master's thesis a few years ago by a student who was sure that this theory was crazy because he was sure that leaders are not that keen for power, and they leave office. So he he studied hundreds and hundreds of leaders. He asked Democratic leaders. Another student did not democratic.

Yeah. He has a set of simple questions in a democracy

in expectation. Were you going to lose re-election if you were not term-limited? If you were going to lose, so the party wouldn't give you the nomination. They'd push you out. So you were out. It wasn't that you chose to be out. Now, you might have announced. But you didn't have a choice leaders who say i'm leaving office for because of ill health which we generally treat as dismissal dismissive. It turns out they die much sooner than leaders who don't leave office, Having said that they are sick, they, in fact, are sick.

Anyway, He went through all the the reasonable alternatives. Out of the hundreds and hundreds and hundreds of leaders he found four who left office without there being an obvious pressure that led them to leave. Well, one of them became the President of the European Union, or whatever the right title is. So maybe that was a move up. One became Ceo of one of the world's biggest corporations. So maybe that was so. That left, too, who left office for no apparent reason. Leaders don't leave office. They want power. Take a look at Donald Trump.

So i'm I'm going to move to a question from the audience on zoom, and and i'm going to compliment it a little bit. So the question is, How does electorate theory explain democratization in Europe in the nineteenth century, and and just to complement it right, like a a lot of the conversation on that particular period of time has focused on this idea of, You know, Communism and the threat of revolution as a factor that invited elites to to democratize one hundred and fifty.

Eh? But I wonder if you know, because electric theory focuses a little more on, on, on elite dynamics. And who's in and who's out among the potential, you know, around within the real selectorate? Right? A a one hundred and fifty.

How does that talk about about about the you know the population, the possibility of revolution and collective action at the and yeah and communism in that period? So we need to know nineteenth century, or we do. You want that? Maybe if you, if you ask me about the concrete out of verbs eleven, twenty, two. I'm going to do better. But okay, we'll give it a shot.

So the the fear of revolution should not be lightly dismissed.

I go back to this Mr. Marx, who didn't have the benefits of this theory, believed that revolution was most likely up here in this tip.

The advanced capitalist societies on the soul which were, and being democratic. So it turns out, if you're according to selectorate logic, if you're above this cut point, you are essentially immune from revolution. Mr. Marx had exactly the wrong places as the candidate's revolution. So if leaders anticipate feared and anticipated the risk of revolution, the way you buy off revolution as opposed to coup is to expand the coalition.

The nineteenth century is a period of intense revolutionary ferment in Europe, so i'm winging it because I don't know, you know, not an expert on the period, but but that's perfectly consistent that the threat of revolution dominated the threat of crew in the nineteenth century in much of Europe when the threat of revolution dominates. This is the current book we're writing when the threat of revolution dominates the solution. To staying in power is to expand the coalition. So buying off the threat, so creating what Lenin later called trade union mentality, making people content. So when you move past that cut point you've secured yourself. So I think that's a

It's a story at the moment. I Haven't tested this, but it seems like a perfectly plausible explanation within the logic of the theory of why so much of Western Europe became democratic. Now there are other reasons which we don't have time for, which do, in fact, have to do with the conquered out of firms. Ah! Which created a an altered incentive structure. Ah! In the competition between the church and monarchs.

I recommend everybody read the invention of Power, Pope's Kings, and the birth of the West, and your thousand closest friends will want copies.

You'll get the answer there and fantastic. So one question I I also had has to do with the with the topic of technology and democracy, right the to. You know, the the book is not super optimistic in general, but towards the end, towards the end, there's this argument on on the role that technology could play by enabling, you know, aa transparency, but also by enabling a participation right two. At the same time, you know it's. Perhaps perhaps this is a developed country logic, right like. Maybe this is not the case in in developing countries or more authoritarian settings, but it's hard to look at The state of like one hundred and fifty super positive role in in in this, in the health of our democracy. So so yeah, So I I was just wondering how you're thinking about about technology in the context of selector theory, and and perhaps in this like deep end of the I should. We should probably preface this by Bruce and I have, like the worst social media presence ever. If this doesn't involve like children or grandchildren at a barbecue Generally we don't have anything to do with social media That, said thinking sort of ten years ago, people were very optimistic that this would allow groups to coordinate. It's also a technology that allows. You know, technology allows high levels of social surveillance.

So you know, under the under the guise of Covid awareness, China has basically found a way to monitor the interactions, the travel of every single person. So technology bites both ways. I personally think we're a little obsessed with this idea of the Internet. And social media. It's probably not a lot different from the advent of television or radio or the mass printing press it. It shapes things up. It gives people a different set of tools, but it hasn't changed the fundamental incentives that people have the disenfranchised on a more inclusive society, because, even if they don't become part of the elite, the society is going to generate public goods for them.

The leader would like to be beholden to as fewer people as possible, and pick those people from as large a group as possible, and The the sort of super interesting thing is the coalition could be really happy in a mass Democracy like i'm going to say South Korea, and they could also be pretty happy in a very tiny winning coalition, something like North Korea. I think we shouldn't underestimate how materially well off the The very few elites are in North Korea. So there's the the coalition can go in various ways, and technology is just a tool that people can use to coordinate. Ah, to push through the agendas. But our focus is not on that sort of tactical. How do I get people to turn on the streets? It's It's what incentives do people have to get on the streets? So we we're, and we'll get a false a teeny piece of other optimism. So in in the second edition of the Dictator's Handbook. We've added a chapter whose title is is Democracy fragile, and the answer is, No, because if you're past this cut point,you're not going to have successful coups and revolutions, so there is reason to be optimistic, and there is an incentive for people who live just below the cut point to try to push their society over it.

Fantastic. So we have probably time for two more questions.

So I read the book a couple of years ago, and I was very, and Venezuelan, so I was very bullish on. You know the impact of sanctions on reducing the availability of funds to buy people off, et cetera, and we might argue that the impact of that that they sort of cost a recomposition from public goodies to club and polygoods one hundred and fifty.

But it also didn't catalyze the coup, and we had Chris Blackman here not so long ago, and he he has a paper that shows that you know negative shocks, commote commodity, price, negative shops, Don't necessarily increase the probability of a coup one and i'm very puzzled by that conclusion, and I wanted to know your your opinion on on erez agmoni. Whether the the reason why there's less availability of funds, matter in terms of how the the people who need to be paid off decide to to defect or not what one hundred.

I think we want to be a little less optimistic about the way sanctions work. So i'll talk case. I know a little bit more about that sort of sanctions against Iraq and Saddam Hussein's regime.

So one of the concept that the nominal reason was, we're going to restrict to access. We're going to drive the Iraq economy into the ground. There'll be less money, but it turned out for the elite. Smuggling became an incredibly lucrative business,and if you all happen to be in charge of the borders you get to choose who gets to smuggle goods, medicines, baby formula, luxury, items that have now massively increased in price, and and you get to control who gets to bring those across the border.

And so it was actually a way of funneling resources into the pockets of Elites I.

But that doesn't necessarily mean the access to rewarding elites is the same. I I don't know the hugeest demand about Russia, but I worry that a lot of the sanctions we've had have been completely ineffectual.

There's chasing down financial assets and stuff two consequences. Well, we Europeans have refused. They haven't given up buying Russian oil and gas, and the price has gone up. So the revenue from that has actually gone up, not down, and to the extent of regular economic activities it's made the elites more beholden on the centre, on the regime on Putin, because that's the only place there are actual resources coming through, because the rest of the economy where they might have made, might have enjoyed some privilege, but could make money with some independence has disappeared.

So it it's made everything, you know. We always like to think of it's better to It's It's better to have a small pie and choose Who's who gets to eat than have a big pie that everyone can feed themselves from right the the early. The latter is better for society, but the former is much better for the leader, and that's so, i'm. I've never been a big optimist on sanctions working.

That was fantastic. Thank you very much. I'm i'm the car of the house one. Um I wanted to ask you. You. You mentioned Ukraine and and um the Arab spring, and I saw that sort of like the model predicted the outcome, but I didn't understand why. What, what in the model predicted the outcome. I know a little bit about

in my mind. In some sense a Mubarak was trying to widen the coalition in the last. Take it's a liberalized sum, but

And in the case of Ukraine I was thinking, and and there was. Maybe the leader wanted to keep it in the but I didn't know how to think of it in terms of the selectorate theory, so well let me give you the just the real sort of quick how how we go about doing those predictions. So we anticipate that a leaders context, their age, their financial situation. The institutions they have are going to shape, the policy choices that they have.

So i'll I'll give you the real quick. You know. Two minute recipe for how to do this. So we run a regression and think about how much public goods are you, providing? How many private goods, how much freedoms are you providing two?

And then what we're really interested in is, how are you off? So if you just to think of this, i'm assuming everyone does regression Here we're just in in some sense thinking of the residual.

To what extent are you off shooting

policies that we would expect you to have then from those policies we can see the kind of

you might think in in terms of how the policies differ from what you expect lead us to too many private goods are going to increase the risk of coup. Too many freedoms and not enough private goods are going to lead to an in ah mass uprisings and a likelihood the institutions are going to liberalize, so that that sort of where those numbers came from. The?

And then you asked this question that had something to do with proper nouns. So I got very confused. But that that's the sort of secret source is, if that's sort of helpful.

But Bruce, No. Bruce has heard of proper noun. One of the things that, as this picture shows us, is, people tend to to look at what a government is doing

as opposed to what a government is doing relative to the size of its winning coalition and relative to the size of its selectorate, which we're not spotting here because they think of governments in categorical ways. They're democratic. They're autocratic, so it's it's not in some absolute sense that Ukraine was producing. Ah, two! If they were producing. Look at the list Here they were producing too few public goods,and two thousand coming into the period running into two thousand and nineteen, not for the size of their economy, not for um, their location or the nature of their economy, but relative to how big a coalition they had to keep loyal.

So once you look at it, which which inherently means you're looking at it in a selectorate way. Once you look at what they're providing. Not in some absolute sense of. Are they making people well off or not, but relative to what an equilibrium keeps their coalition loyal rather than defecting at this size of constraint on coalition and selective size. Then you see whether they are vulnerable because they're not doing enough. I mean, in in the case of of Ukraine.