From de Mesquita and Smith's The Dictator's Handbook:

How do tyrants hold on to power for so long? For that matter, why is the tenure of successful democratic leaders so brief? How can countries with such misguided and corrupt economic policies survive for so long? Why are countries that are prone to natural disasters so often unprepared when they happen? And how can lands rich with natural resources at the same time support populations stricken with poverty?

Equally, we may well wonder: Why are Wall Street executives so politically tone-deaf that they dole out billions in bonuses while plunging the global economy into recession? Why is the leadership of a corporation, on whose shoulders so much responsibility rests, decided by so few people? Why are failed CEOs retained and paid handsomely even as their company’s shareholders lose their shirts?

In one form or another, these questions of political behavior pop up again and again. Each explanation, each story, treats the errant leader and his or her faulty decision making as a one-off, one-of-a-kind situation. But there is nothing unique about political behavior.

...We look at each case and conclude they are different, uncharacteristic anomalies. Yet they are held together by the logic of politics, the rules ruling rulers.

...To understand politics properly, we must modify one assumption in particular: we must stop thinking that leaders can lead unilaterally.

No leader is monolithic. If we are to make any sense of how power works, we must stop thinking that North Korea’s Kim Jong Il can do whatever he wants. We must stop believing that Adolf Hitler or Joseph Stalin or Genghis Khan or anyone else is in sole control of their respective nation. We must give up the notion that Enron’s Kenneth Lay or British Petroleum’s (BP) Tony Hayward knew about everything that was going on in their companies, or that they could have made all the big decisions. All of these notions are flat out wrong because no emperor, no king, no sheikh, no tyrant, no chief executive officer (CEO), no family head, no leader whatsoever can govern alone.

...For leaders, the political landscape can be broken down into three groups of people: the nominal selectorate, the real selectorate, and the winning coalition.

The nominal selectorate includes every person who has at least some legal say in choosing their leader. In the United States it is everyone eligible to vote, meaning all citizens aged eighteen and over. Of course, as every citizen of the United States must realize, the right to vote is important, but at the end of the day no individual voter has a lot of say over who leads the country. Members of the nominal selectorate in a universal-franchise democracy have a toe in the political door, but not much more. In that way, the nominal selectorate in the United States or Britain or France doesn’t have much more power than its counterparts, the “voters,” in the old Soviet Union. There, too, all adult citizens had the right to vote, although their choice was generally to say Yes or No to the candidates chosen by the Communist Party rather than to pick among candidates. Still, every adult citizen of the Soviet Union, where voting was mandatory, was a member of the nominal selectorate. The second stratum of politics consists of the real selectorate. This is the group that actually chooses the leader. In today’s China (as in the old Soviet Union), it consists of all voting members of the Communist Party; in Saudi Arabia’s monarchy it is the senior members of the royal family; in Great Britain, the voters backing members of parliament from the majority party. The most important of these groups is the third, the subset of the real selectorate that makes up a winning coalition. These are the people whose support is essential if a leader is to survive in office. In the USSR the winning coalition consisted of a small group of people inside the Communist Party who chose candidates and who controlled policy. Their support was essential to keep the commissars and general secretary in power. These were the folks with the power to overthrow their boss—and he knew it. In the United States the winning coalition is vastly larger. It consists of the minimal number of voters who give the edge to one presidential candidate (or, at the legislative level in each state or district, to a member of the House or Senate) over another. For Louis XIV, the winning coalition was a handful of members of the court, military officers, and senior civil servants without whom a rival could have replaced the king.

Fundamentally, the nominal selectorate is the pool of potential support for a leader; the real selectorate includes those whose support is truly influential; and the winning coalition extends only to those essential supporters without whom the leader would be finished. A simple way to think of these groups is: interchangeables, influentials, and essentials.

In the United States, the voters are the nominal selectorate — interchangeables. As for the real selectorate — influentials — the electors of the electoral college really choose the president (just like the party faithful picked their general secretary back in the USSR), but the electors nowadays are normatively bound to vote the way their state’s voters voted, so they don’t really have much independent clout in practice. In the United States, the nominal selectorate and real selectorate are therefore pretty closely aligned. This is why, even though you’re only one among many voters, interchangeable with others, you still feel like your vote is influential — that it counts and is counted. The winning coalition — essentials — in the United States is the smallest bunch of voters, properly distributed among the states, whose support for a candidate translates into a presidential win in the electoral college. And while the winning coalition (essentials) is a pretty big fraction of the nominal selectorate (interchangeables), it doesn’t have to be even close to a majority of the US population. In fact, given the federal structure of American elections, it’s possible to control the executive and legislative branches of government with as little as about one fifth of the vote, if the votes are really efficiently placed...

Looking elsewhere we see that there can be a vast range in the size of the nominal selectorate, the real selectorate, and the winning coalition. Some places, like North Korea, have a mass nominal selectorate in which everyone gets to vote — it’s a joke, of course — a tiny real selectorate who actually pick their leader, and a winning coalition that surely is no more than maybe a couple of hundred people (if that) and without whom even North Korea’s first leader, Kim Il Sung, could have been reduced to ashes. Other nations, like Saudi Arabia, have a tiny nominal and real selectorate, made up of the royal family and a few crucial merchants and religious leaders. The Saudi winning coalition is perhaps even smaller than North Korea’s.

...These three groups provide the foundation of all that’s to come in the rest of this book, and, more importantly, the foundation behind the working of politics in all organizations, big and small. Variations in the sizes of these three groups give politics a three-dimensional structure that clarifies the complexity of political life. By working out how these dimensions intersect—that is, each organization’s mix in the size of its interchangeable, influential, and essential groups—we can come to grips with the puzzles of politics. Differences in the size of these groups across states, businesses, and any other organization, as you will see, decide almost everything that happens in politics—what leaders can do, what they can and can’t get away with, to whom they answer, and the relative qualities of life that everyone under them enjoys (or, too often, doesn’t enjoy).