Once the new leader has reshaped the coalition that first brought them to power, established the right supporters, and begun generating revenue from taxes, they face “the real task of governing: allocating money to keep the coalition happy—but not too happy—and providing just enough to keep the interchangeables from rising up in revolt” (101). This chapter focuses on allocating public goods that benefit everyone in society.

Bueno de Mesquita and Smith emphasize that democratic rulers do not need to be civic minded or “harbor warm and cuddly feelings for their citizens” to allocate public goods (103). Instead, they must be survival minded. Leaders in democracies understand that staying in power relies on support from a large coalition. The only way to get this support is to provide popular public goods that ensure a high quality of life. Autocrats rely on smaller coalitions. Thus, they can give targeted rewards to their supporters rather than the everyday people. Leaders in small-coalition systems can use their discretionary money, or money that does not go to supporters, to improve the standard of living in their countries. This practice is rare.

The authors discuss five public goods and how their allocation differs between autocracies and democracies. Even autocratic leaders need to provide some public benefits to ensure that workers are productive enough to pay taxes, which lines the pockets of these leaders and their supporters. The first public good is education. In large coalitions, higher levels of education are accessible to everyone. In small coalitions, individuals outside the leader’s winning coalition only have access to basic education. This level of education ensures the everyday people are educated enough to do their jobs. Highly educated people are significant threats to autocrats.

Health care is the second public good. Like education, autocratic leaders need to provide the individuals who are in the labor force with access to basic health care so that they can work. Resources should only go to those who help the ruler stay in power now, not those who might be valuable at a future date. For this reason, autocrats do not typically spend money on infants or the elderly since they are outside the labor force and will not help the leader’s political survival. Infant mortality is high in small-coalition systems. Large-coalition systems do not exclude babies and the elderly from health care.

The third public good is clean drinking water. Everyone has access to good water when the coalition is large. In contrast, good water is only for the privileged in small coalitions. In autocratic countries, many of the young and old die from easily prevented, water-borne diseases like diarrhea, dysentery, and cholera. These are the very lives that autocrats do not value, which is why they do not put resources into clean drinking water for everyone.

Infrastructure represents the fifth public good. Autocrats build roads because their workers need to use them to transport their goods and services to markets. Markets generate money for the autocrats. Yet, these leaders must be careful about building too many roads. New regional and political power centers could crop up if the country is too well connected. Moreover, rebels can use roads to better attack the leader and their supporters. Autocrats will often poorly build roads to minimize threats to their power.

The final public good is freedom. Free press, freedom of speech, and freedom of assembly are abundant when the coalition is large. Democratic leaders foster this public good for their own political survival. Citizens of democracies have come to expect such freedoms. If their leaders started reducing these freedoms, then public support would shift to another leader who would maintain them. Freedom is scarce when the coalition is small. For autocratic leaders, freedom represents serious risk to staying in power. 

While there may be rulers who set out to improve the quality of life for everyday people, these types of rulers are rare and often do not survive in politics long. Political survival depends on leaders rewarding “their coalition of essential backers before they reward the people in general and even before they reward themselves” (127). The most efficient way for leaders to reward small coalitions is through private rewards. Leaders use such rewards to maintain their supporters’ loyalty.

Bueno de Mesquita and Smith believe that “power leads to corruption and corruption leads to power” (128). Corruption empowers leaders. Successful leaders are not above repressing, oppressing, or even murdering their rivals. They need money to pay their supporters to do such terrible things. This brutality is expensive. Leaders recognize that if they do not pay their supporters to do these terrible things, then their political survival is at risk. A challenger will come along who is willing to exchange “terrible deeds for riches and power” and buy off the current leader’s supporters (129). Thus, leaders must use the wealth they receive from their corrupt rule to reward their supporters. Since the supporters benefit from their leader’s corruption, they rarely advocate for changes to the political system, thus keeping the leader in power. All of those who matter in the political system—the leaders and their supporters—are corrupt. Corruption is itself a private reward.

Corruption also happens in large-coalition systems. Democratic leaders design public policies that appeal to their constituents. This means that there are still everyday people outside of this coalition who may not benefit from the policy. Like autocratic leaders, democratic leaders do what is best for their supporters to maintain their loyalty, rather than what might be best for the people.

Leaders can never take their coalitions’ loyalty for granted. Those leaders who want to enrich themselves or even help the everyday people need to do so through discretionary funds, not coalition money. Leaders sometimes miscalculate what will keep their coalitions happy. This miscalculation often costs leaders their power and even life.

Reducing corruption, including through increasing sentences for corruption and passing legislation, seems like a desirable goal. Such approaches, however, are counterproductive. In small-coalition systems, leaders and their supporters—everyone who matters—are all corrupt. Bueno de Mesquita and Smith believe that increasing sentences for corruption simply provides another tool corrupt leaders can use to suppress their people. For example, autocracies often prosecute and even execute reformers and whistleblowers.