Why dictatorship / monarchy is bad

“Dictators ride on tigers from which they dare not dismount” - Winston Churchill

I often hear the claim that dictatorship or monarchy as a type of government is not so bad. We just need someone who is reasonable and competent in the role. This is an incorrect notion — but it is not immediately obvious why. In this post I will discuss this question, leaning heavily on the great book The Dictator’s Handbook.

Dictators are usually viewed as some combination of evil and incompetent. In general, when a group of people are seen as evil and incompetent, there is almost always an overlooked question of incentives. A dictator’s incentive is not to be competent at providing good governance for his subjects; his incentive is to stay in power. And to stay in power he needs the support of other powerful people, his essential backers. They desire to get their share of goodies. If the dictator does not supply these, he will lose their support, and will be deposed (likely violently). Dictators must follow not the logic of helping the country, but the logic of survival. And at this, many of them are brilliant. It takes skill to stay in a highly coveted position for decades, while facing complex challenges. One can imagine a hypothetical competent and good ruler, but he would be working under strong constraints from powerful people on whose support he ultimately depends, which means he is under strong constraints regardless of his intentions. His main goal must be to stay in power, and if we have a person for whom this is not his main goal, he would not have succeeded at still being in power in any country.

This perspective puts light on the phenomenon of the resource curse: that countries with more natural resources paradoxically tend to be worse off. There are a few main ways for a dictator to provide money for his essential backers. One is from taxation, and another is from natural resources. To get a decent income from taxation, it is a requirement to have some economic freedom. Otherwise there will not be enough wealth and trade to generate sufficient revenue through taxation. However, such freedoms come with a risk for the dictator, that people will coordinate and organize against his rule. Therefore it is preferable for the dictator to get his income from natural resources. From this perspective we see how natural resources turn out to be a negative for the population in countries with autocratic rule. First, because it helps the dictator to stay in power, and second, because it removes the incentives for the dictator to allow more economic freedom. And most of the income from the natural resources does not go to the population at all, but instead to dictator, his cronies and the state apparatus.

For a perspective shift, I would suggest that we see dictators not as leaders of countries that by bad fortune happen to not be good, but instead as usurpers who have taken control over an income source, and keeps the population in the country in an open prison, in order to secure control of this source. For an example, let us look at when Cyclone Nargis hit Myanmar in 2008, which was at this time ruled by the dictator Than Shwe. The storm caused widespread damage, and more than 100.000 casualties. Than Shwe did nothing to help the population — instead he blocked the internationally provided disaster relief from entering the country, until he was provided a sufficiently large payment for allowing this to happen. Later he forced the victims of the disaster away from the shelters and back to their destroyed homes. This lead to bad outcomes for the population, but it also resulted in less risk for his rule in form of congregation and riots. He was not a leader of the population, but their jailor. This is reminiscent of how Fidel Castro’s sister Juanita put it:

I cannot longer remain indifferent to what is happening in my country. My brothers Fidel and Raúl have made it an enormous prison surrounded by water.

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What about democracy, does that not have the same problems, that the rulers goal is to satisfy the coalition? Also can special interests be viewed as the same as essential backers whose needs the politician needs to fulfill? These objections are correct. However, there is a difference of degree - and a crucial difference of degree. For various reasons, politicians in democracies cannot solely provide goods for their supporters. This is partly because their supporters are not a distinct group. But even if they could hypothetically, this would still provide goods and services for a large proportion of a population. This is in contrast to dictators that are essentially free to fuck over the whole population, as long as they provide for at small number of essential backers. Also, since democratic politician must divide the goods among a large number of people, the value of the goods that each individual receives is not so high, so the politician has less secured loyalty, and the voter can easily shift to supporting another politician. In addition to better good and services in democracies, people are also mostly secured basic rights and property rights. This is because it is in the interest of the broad coalition that is required to keep politicians in power. One can easily quibble and critique the fulfillment of these rights in many democratic countries, but it is nonetheless extremely different from individual rights in most dictatorships, where the dictator can jail you or confiscate your property at will.

These things said, it is good to keep in mind and oppose these traits of democracies that can make it more dictator-like. This includes watching out for separation of powers, for clientilism and political patronage, and for powerful special interests. But keep in mind that these things are bad because they make democracies just a little more like dictatorships. Political power of special interests is bad, but imagine if every political decision was made based on the special interests of just a small number of people, and the politicians had no reason to hide this, or look out for the rest of the population in any way.

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I mentioned that two ways for dictators to secure the resources to reward their essential backers are through taxation and through natural resources. A third way is, sadly, through aid. Aid can effectively act in the same way as a natural resource, thereby both helping the dictator stay in power, and removing need to allow more economic freedom. This is main reason that aid has been so ineffective in increasing wealth in poor countries. The low correlation between aid and economic growth is well known. See also this study which uses a feature that can act somewhat like a randomized trial of the impact of aid: UN security council membership. This membership is mostly based on whose turn it is, and member countries receive significantly more aid than non-members. The study found that on average, nations elected to the UN security council grow more slowly, become less democratic and experience more restrictions on press freedoms than eligible nations that are not elected.

Economic aid can get people through hardships, and possibly help set up production, as well as with other things. But ultimately, sustainable economic growth and lasting wealth is attained by people being productive. And here the problem is that aid can and will help dictators stay in power; and dictators are bad for productivity and economic growth. A dictators is bad for economic growth mainly for these three reasons: 1. He has limited incentive to provide opportunity for economic growth for the broad population, since they are not his essential backers. 2. He needs to provide private rewards to his essential backers which are substantially higher than what they could expect if they were not in his coalition. 3. Corruption is widespread in dictatorships, including on levels that are removed from the dictator himself. Corruption aids a dictator in multiple ways. It is a good way to help with private rewards in form of corruption opportunities. But also importantly, it provides a good way to deal with political opponents. If society is very corrupt, all powerful people will have some instances of corruption in their past, which can then be exploited by the dictator.

This issue of aid helping dictators entails that it is extremely difficult to estimate the full impact of aid, and to provide aid where we can be confident that it is overall beneficial to the recipient country. And this is true even with careful engagement, measurement and the right goals. We can measure how many malaria nets are installed, but it is much harder to measure how much money is siphoned and used to support the oppressive dictatorship, and the long-term effects of this.

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Plato wrote a book describing the ideal of the philosopher king: a ruler that is good and wise, and willing to live a simple life. He describes these aspects in detail, but he overlooked the most important question: How these rulers would maintain power. The ruler must have support from his essential backers, and they have their own incentives. If they think they can get better rewards under a different leader, they will shift their support to him, even though he likely won’t be Plato’s ideal. And thus all the ideals and idealism about dictatorship as a form of governance are in vain, if they do not address this reality.