The Dictator's Handbook is a layman's exposition of selectorate theory. The idea behind the theory is that a political leader (yes, every dictator is a politician) will do anything to stay in power. The difference between a dictator and a democratic leader is the size of the coalition that brought them to power and keeps them there:
small coalitions encourage stable, corrupt, private goods–oriented regimes in which the essentials do great while even the broader support coalition does pretty poorly. The choice between enhancing social welfare and enriching a privileged few is not a question of how benevolent a leader is. Honorable motives might seem important, but they are overwhelmed by the need to keep essential supporters happy, and the means of keeping them happy depends on how many need rewarding. (page 31)
Basically, when you have a small group of people who you rely on to keep you in power, all you have to do is to buy them off with money, special privileges, huge private homes built at private expense, etc. Since no one else counts, the remainder of the money can be socked away in your Swiss bank account, used to buy private jets, etc.
However, if your coalition is huge, it's too expensive to buy them off one at a time. At that point, the leader is now incentivized to provide public goods like improving the education system (grows the economy, so tax receipts improve), provide freedom of speech, freedom of association, better healthcare, etc.
The statistics are grim for democratic politicians: they rarely stay in power for long, while dictators get to stay in power for decades. The exception is at the beginning of their rule, where democratic leaders have a much higher survival rate in the first 6-12 months (during the honeymoon period), while dictators have a much lower survival rate. This explains why many dictators pretend to be democrats when they first come to power.
OK, there are examples of countries that shift from being dictatorships to becoming democratic countries. How do those happen? It turns out that dictators are human, and do age and die:
Impending death often induces political death. For this reason a leader’s health is the most important state secret. However, once a leader is dead the need for secrecy vanishes, so to gauge the importance of health we were able to collect data on the date and cause of death of political leaders from sources such as obituaries. On average, the risk of being deposed in any particular year is about 19 percent. However, for leaders like Marcos and the shah who have a serious chronic health condition that will lead to death within three years, this deposition risk nearly doubles. Health concerns particularly exacerbate the risk of removal by revolution and coup.5 The epitaph “died in office” is generally reserved for leaders who hide their illness. (pg. 50)
Whenever there's a leadership shuffle, the existing coalition no longer is assured that they would be the "in group" with the successor. When that happens, there's no incentive to protect the ruler, and public protests and revolutions go unanswered. Of course, whether one dictator just gets replaced with another dictator or a true democratic rule is a different story. The authors explain The Resource Curse as follows. The leader has to pay off his coalition. In a country with no natural resources, the only way to get that money is through taxes. But if those taxes get used to pay the coalition, then people lose the incentive to work, especially if the taxes are accompanied by draconian restrictions on freedom of speech and assembly. The leader eventually runs out of money and wants to increase his tax intake. The only way to do so is to improve productivity, and that leads to reducing restrictions on speech, etc. But that also leads to demands for better public services (which in and of themselves also improve productivity). But that incentive goes away if the country has oil. The production and sale of oil resources can be done entirely by non-citizens with the money funneling directly to the leader who can then only pay his coalition. Now he doesn't need the regular folks to be productive and can afford to be as oppressive as he likes! By the way, this means that when a poor country with a dictator runs out of money and the people are starving, the right thing to do isn't to send that country money! The dictator will just appropriate the money (or food aid, or other resources --- the book has plenty of examples) and use it to pay his coalition! By starving the dictator of money, he has no choice to either look for ways to improve the economy or he risks his coalition abandoning him to the revolution!
The book also explains why dictatorships have elections, even though they're by and large sham and fake:
the best way to stay in power is to keep the coalition small and, crucially, to make sure that everyone in it knows that there are plenty of replacements for them. This is why you will often read about regular elections in tyrannical states. Everyone knows that these elections don’t count, and yet people go along with them. Rigged elections are not about picking leaders. They are not about gaining legitimacy. How can an election be legitimate when its outcome is known before the vote even occurs? Rigged elections are a warning to powerful politicians that they are expendable if they deviate from the leader’s desired path. (page 84)
The authors point out that companies are also dictatorships:
doing a good job is not enough to ensure political survival. That is true whether one is running a business, a charity, or a national government. How much a leader’s performance influences the length of his tenure in office is a highly subjective matter. It might seem obvious that it is important to have people in the coalition of key backers who are competent at implementing the leader’s policies. But autocracy isn’t about good governance. It’s about what’s good for the leader, not what’s good for the people. In fact, having competent ministers or competent corporate board members can be a dangerous mistake. Competent people, after all, are potential (and potentially competent) rivals. The three most important characteristics of a coalition are (1) loyalty, (2) loyalty, and (3) loyalty. Successful leaders surround themselves with trusted friends and family, and rid themselves of any ambitious supporters. Carly Fiorina had a hard time achieving that objective, and as a result she failed to last long. Fidel Castro, by contrast, was a master (of course, he had fewer impediments to overcome in what he could do than did Fiorina), and he lasted in power for nearly half a century. (Page 81)
The book also explains why top universities behave the way they do, which is that they are also small coalition political systems:
If you doubt it, have a look one day at how many administrators university presidents like to hire compared to faculty. It seems you can never have too many supporting-cast administrators whose jobs depend on keeping the person at the top happy. Faculty, on the other hand, don’t have to keep their “bosses” happy; they have to keep their colleagues happy long enough to get tenure and then they are pretty free to do whatever they want—why do you think we can write this passage! There is a delicate balance to be struck, to be sure, and so successful university leaders are especially skilled at doling out private rewards to anyone who could be a threat. People who raise money for the university frequently get a percentage of what they bring in to incentivize them. Faculty who are cooperative are likely to more readily be granted sabbaticals, get research funds, pick the classes (usually small) that they teach, and so forth. So we shouldn’t be surprised by distortions in merit in universities; they really are small-coalition regimes. (pg. 138)
Using this (admittedly) very cynical lens, the authors apply this framework across a number of domains and regimes. For instance, this explains why democracies tend to have good building codes and when natural disasters happen, they expect rescues to be fast and effective. Similarly, sports organizations like the International Olympic Committees and FIFA are small coalition systems so you expect huge amounts of corruption (and indeed they are). Similarly, when dealing with corporate corruption, what you want to do is to increase the number of influencers on the board to the point where they are too expensive to be bought off, rather than introduce measures like Sarbanes-Oxley.
One of the most interesting parts of the book is the section of war. It explains why democracies when they fight tend to fight harder and put more of their resources into battle. Because the coalition is so high, the value to each individual person to siphon off the resources into their pockets is comparatively low. (They estimate that during the Arab-Israeli 6 day war, the potential benefits on the Israeli side comes down to about $60 per person, while on the Egyptian side it's closer to $150,000 per person) For most Israelis $60 per person isn't enough to justify losing the war! Conversely a dictator is more concerned about protecting his own personal resources, so unless the war is easily won he'd much rather retreat or even lose ground than pour in more resources. One interesting side effect also explains why the United States has leaders who frequently proclaim their love of democratic values while quietly supporting dictators with bribes in the form of foreign aid. It's much cheaper to bribe a dictator who has a small coalition than to bribe the electorate of a democracy! Note that democratic leaders have very short expected terms in office, so they're much more impatient about getting results in time for the next election.
The recognition of Israel was an extremely unpopular policy shift in Egypt. This is why Sadat was able to extract so much from the United States. Unfortunately for Sadat, it also contributed to his assassination in 1981. Fundamentalists threw grenades and attacked with automatic rifle fire during an annual parade. Although it officially recognizes Israel, the Egyptian government has done almost nothing to encourage the Egyptian people to moderate their hatred for Israel. In a BBC survey conducted nearly thirty years after the Camp David agreement was struck, 78 percent of Egyptians indicated that they perceived Israel as having a negative impact in the world, far above the average in other countries in the survey.16 Of course, changing the negative attitude toward Israel in Egypt would just reduce the amount of aid the Egyptian government can extract from the United States. (pg. 201)
The willingness of democracies to try harder goes a long way to explaining why seemingly weaker democracies often overcome seemingly stronger autocracies. The United States was once a weak nation. And yet in the Mexican-American War (1846–1848) it defeated the much larger, better-trained, and highly favored Mexican army. The minuscule Republic of Venice survived for over a thousand years until it was finally defeated by Napoleon in 1797. Despite its small size and limited resources, it fought above its weight class throughout the Middle Ages. It played a crucial role in the Fourth Crusade, which led to the sacking of Constantinople, in which Venice captured the lion’s share of the Byzantine Empire’s wealth. The smaller but more democratic government of Bismarck’s Prussia defeated the larger—and widely favored—Austrian monarchy in the Seven Weeks’ War in 1866. Prussia then went on to defeat Louis Napoleon’s monarchical France in the 1870–1871 Franco-Prussian War. And as we have seen, tiny Israel has repeatedly beaten its larger neighbors. History is full of democratic Davids beating autocratic Goliaths. (pg. 268)
The book ends with a bunch of advice on how to encourage better behaved politicians. It definitely mentions that financial aid to a dictatorship is counter productive. But also ways to trigger transitions:
The incentives to encourage leaders to step aside could be further strengthened if, in exchange for agreeing to step down quickly, they would be granted the right to retain some significant amount of ill-gotten gains and safe havens for exile where the soon-to-be ex-leadership and their families can live out their lives in peace. Offering such deals might prove self-fulfilling. Once essential supporters believe their leader might take such a deal, they themselves start looking for his replacement, so even if the leader had wanted to stay and fight, he might no longer have the support to do so. The urge for retribution is better put aside to give dictators a reason to give up rather than fight. (pg. 339)
The book does have flaws. For instance, it was written right after 2022, so it's over optimistic about the US remaining a democracy. They claim over and over that countries with large coalitions have never backslid in history, but we can clearly see that by controlling the house, senate, the executive branch, and the supreme court, the Republicans are succeeding in reducing the size of their essential coalition. I definitely think they're excessively optimistic about this.
The other flaw I see is their claim that immigration increases the size of the coalition and therefore encourages countries to stay democratic and have better public policy. That's definitely not what we're seeing today, and in fact, there are plenty of studies showing that public policies like universal healthcare, etc., are more easily achieved in countries where immigration is kept to a very low level. I don't know how the authors would explain that.
Regardless, I found myself highlighting passage after passage in this book. It's very much worth reading and thoroughly worth your time. Yes, I admit the book's title put me off but it shouldn't have.