For Dictators, Neither Carrots nor Sticks

Can economic relationships affect a dictator?  Seven years ago, I wrote an article from Damascus about how the European Union was trying to cultivate economic ties with Syria, a country that the United States had labeled a state sponsor of terrorism. Today, those efforts seem to have been futile.  But were they worth a try?

Back then, the EU was all warm and fuzzy about Syria.  Its director-general of foreign aid said that Syria was “already an active partner of our ring of friends.”  Referring to Syria and other volatile countries in the Mediterranean, the European Commission’s representative in Damascus told me, “They are neighbors, so we have to care for them.”

So much for caring.  The EU’s trade with Syria – and with Libya – has clearly done nothing to quench the ruthless thirst for power that led those countries’ dictators to pile up the bodies of their people.  On the other hand, the sanctions that the United States has applied to rogue states haven’t been particularly effective, either.  They’ve punished despotic elites (except when the elites have found ways around them, as Saddam Hussein did), but they’ve also punished regular citizens.

In fact, economic relationships are a double-edged sword whichever way you wield them. If you try to make them grow, then you’ll help the rank and file citizens but also allow the dictators to enrich themselves.  If you cut them off, then you’ll deny the dictators some creature comforts but also damage the livelihoods of the rank and file.  At best, sanctions are a very blunt instrument.

They’re not the only economic instrument, though. This past week, Owen Barder and Kim Elliott of the Center for Global Development proposed another way to overturn authoritarian regimes: once a regime is declared “illegitimate” by the United Nations, declare that no new contracts it signs will be honored in court.  The idea is that dictators won’t be able to buy more guns and supplies, and new governments that succeed them won’t be encumbered by their debts.  There’s just one problem with this idea, though; it does not change one bit the incentives of a dictator with cash on hand, or one who deals with countries unlikely to declare its contracts illegitimate. Would Russia, Syria’s main arms supplier, refuse to honor its contracts with the Syrian government?  Come on now!

But perhaps this omission by the folks at CGD was simply an acknowledgment of what we should have already learned by now: changes in economic relationships simply don’t have much effect on already wealthy despots. Just like the honey badger, they do what they want.