Michael Lerner and Ethan Hill have dubbed Bruce Bueno de Mesquita the new Nostradamus for predictions like these:
- Forecasted the second Intifada and the death of the Mideast peace process, two years before it happened.
- Defied Russia specialists by predicting who would succeed Brezhnev. “The model identified Andropov, who nobody at the time even considered a possibility,” he says.
- Predicted that Daniel Ortega and the Sandanistas would be voted out of office in Nicaragua, two years before it happened.
- Four months before Tiananmen Square, said China’s hardliners would crack down harshly on dissidents.
- Predicted France’s hair’s-breadth passage of the European Union’s Maastricht Treaty.
- Predicted the exact implementation of the 1998 Good Friday Agreement between Britain and the IRA.
- Predicted China’s reclaiming of Hong Kong and the exact manner the handover would take place, 12 years before it happened.
Bueno de Mesquita got his start by looking at Iran:
His first foray into forecasting controversy took place in 1984, when he published an article in PS, the flagship journal of the American Political Science Association, predicting who would succeed Iran’s ruling Ayatollah Khomeini upon his death.He had developed a rudimentary forecasting model that was different from anything anyone had seen before in that it was not designed around one particular foreign-policy problem, but could be applied to any international conflict. “It was the first attempt at a general mathematical model of international conflict,” he says.
His model predicted that upon Khomeini’s death, an ayatollah named Hojatolislam Khamenei and an obscure junior cleric named Akbar Hashemi Rafsanjani would emerge to lead the country together. At the time, Rafsanjani was so little known that his name had yet to appear in the New York Times.
Even more improbably, Khomeini had already designated his successor, and it was neither Ayatollah Khamenei nor Rafsanjani. Khomeini’s stature among Iran’s ruling clerics made it inconceivable that they would defy their leader’s choice.
At the APSA meeting subsequent to the article’s publication, Bueno de Mesquita was roundly denounced as a quack by the Iran experts — a charlatan peddling voodoo mathematics. “They said I was an idiot, basically. They said my work was evil, offensive, that it should be suppressed,” he recalls. “It was a very difficult time in my career.”
Five years later, when Khomeini died, lo and behold, Iran’s fractious ruling clerics chose Ayatollah Khamenei and Hashemi Rafsanjani to jointly lead the country. At the next APSA meeting, the man who had been Bueno de Mesquita’s most vocal detractor raised his hand and publicly apologized to him.
Bueno de Mesquita points to dictatorships to demonstrate rational choice for him:
“If you liberate people from the constraint of having to satisfy other people in order to advance themselves, people don’t do good things.” When analyzing a problem in international relations, Bueno de Mesquita doesn’t give a whit about the local culture, history, economy, or any of the other considerations that more traditional political scientists weigh. In fact, rational choicers like Bueno de Mesquita tend to view such traditional approaches with a condescension bordering on disdain. “One is the study of politics as an expression of personal opinion as opposed to political science,” he says dryly. His only concern is with what the political actors want, what they say they want (often two very different things), and how each of their various options will affect their career advancement. He feeds this data into his computer model and out pop the answers.
His “political science” models earn him significant consulting fees in the private sector:
“In the private sector, we deal with three areas: litigation, mergers and acquisitions, and regulation,” he says. “On average in litigation, we produce a settlement that is 40 percent better than what the attorneys think is the best that can be achieved.” While Bueno de Mesquita’s present client list is confidential, past clients include Union Carbide, which needed a little help in structuring its defense after its 1984 chemical-plant disaster in Bhopal, India, claimed the lives of an estimated 22,000 people; the giant accounting firm Arthur Andersen; and British Aerospace during its merger with GEC-Marconi.
These examples demonstrate how his work brings real economic thinking to policy:
Perhaps not coincidentally, the recent agreement that the United States reached with the government of Pyongyang closely resembles the one that Bueno de Mesquita’s model suggested: Kim agrees to dismantle his existing nuclear weapons but not his existing nuclear capability. “He puts it in mothballs with IAEA (International Atomic Energy Agency) inspectors on site 24 hours a day, 365 days a year. And in exchange, we provide him with $1.2 billion a year, which we label ‘foreign aid,’ of course.” The “foreign-aid” figure published in the newspapers was $400 million, which concerns Bueno de Mesquita. “I read that and I said, I hope that’s not the deal because it’s not enough money. He needs $1.2 billion, approximately, to sustain the loyalty of his cronies in the military and so forth. It’s unpleasant, this is a nasty man, but we’re stuck with it. The nice part of the deal is that it’s self-enforcing. Each side has a reason to credibly commit to their part of the deal.”Recently, he’s applied his science to come up with some novel ideas on how to resolve the Israeli-Palestinian conflict. “In my view, it is a mistake to look for strategies that build mutual trust because it ain’t going to happen. Neither side has any reason to trust the other, for good reason,” he says. “Land for peace is an inherently flawed concept because it has a fundamental commitment problem. If I give you land on your promise of peace in the future, after you have the land, as the Israelis well know, it is very costly to take it back if you renege. You have an incentive to say, ‘You made a good step, it’s a gesture in the right direction, but I thought you were giving me more than this. I can’t give you peace just for this, it’s not enough.’ Conversely, if we have peace for land—you disarm, put down your weapons, and get rid of the threats to me and I will then give you the land—the reverse is true: I have no commitment to follow through. Once you’ve laid down your weapons, you have no threat.”
Bueno de Mesquita’s answer to this dilemma, which he discussed with the former Israeli prime minister and recently elected Labor leader Ehud Barak, is a formula that guarantees mutual incentives to cooperate. “In a peaceful world, what do the Palestinians anticipate will be their main source of economic viability? Tourism. This is what their own documents say. And, of course, the Israelis make a lot of money from tourism, and that revenue is very easy to track. As a starting point requiring no trust, no mutual cooperation, I would suggest that all tourist revenue be [divided by] a fixed formula based on the current population of the region, which is roughly 40 percent Palestinian, 60 percent Israeli. The money would go automatically to each side. Now, when there is violence, tourists don’t come. So the tourist revenue is automatically responsive to the level of violence on either side for both sides. You have an accounting firm that both sides agree to, you let the U.N. do it, whatever. It’s completely self-enforcing, it requires no cooperation except the initial agreement by the Israelis that they are going to turn this part of the revenue over, on a fixed formula based on population, to some international agency, and that’s that.”