Durability vs. Stability: The Kim Dynasty and the Stationary Bandit Model
The Kim dynasty is clearly durable: it’s ruled North Korea for 64 years and three generations. But it’s much harder to tell if the Kim dynasty is stable – i.e., if it could survive a diverse array of disturbances.* The Kims have clearly weathered a few big storms: the Korean War, the collapse of the Soviet Union and drastic decline in energy subsidies, and the death of two leaders. But for the most part, the Kims keep such a tight lid on things that no one, not even Kims themselves, knows whether reforms would spiral out of control and end their rule.
The stationary bandit model fails to clearly distinguish durability from stability. But on reflection, the model’s hopeful implications presuppose not mere durability, but stability. A stationary bandit who knows he’ll retain power whatever he does has a solid selfish motive to adopt pro-growth policies. But the latest scion of a rigid thousand-year dynasty can’t afford to be so open-minded. He knows a formula for holding power; but for all he knows, it’s the only formula. Even if there’s merely a 10% chance that reform brings the regime crashing down, that’s a big deterrent.
I freely admit the relevance of many of the other stories readers told; as a few readers pointed out, I’ve told them myself. A dictator is effectively super-wealthy, so the prospect of getting even richer may fail to entice him. A super-wealthy dictator may prefer lavish parades to bigger palaces. Etc. Nevertheless, North Korea isn’t a great test of the stationary bandit model because durability and stability are not the same.
Of course, once you take this distinction seriously, you have to ask yourself: When, if ever, do bandit rulers know beyond a reasonable doubt that they’re genuinely stable? To quote Merlin in Excalibur, “Looking at the cake is like looking at the future, until you’ve tasted
it what do you really know? And then, of course, it’s too late.”
* If you want to see stability in action, take a look at the Weeble. As the toy’s jingle famously said, “Weebles wobble but they don’t fall down.”