Triggered by the desire to calibrate the value of the game theory research of Bruce Bueno De Mesquita (BDM) I found a useful review of his work by Michael Lerner. Following is a sample from the article — of BDM’s thoughts on more effective approaches to the Middle East conflict:
Recently, heâ€™s applied his science to come up with some novel ideas on how to resolve the Israeli-Palestinian conflict. â€œIn my view, it is a mistake to look for strategies that build mutual trust because it ainâ€™t going to happen. Neither side has any reason to trust the other, for good reason,â€ he says. â€œLand 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, â€˜You made a good step, itâ€™s a gesture in the right direction, but I thought you were giving me more than this. I canâ€™t give you peace just for this, itâ€™s not enough.â€™ Conversely, if we have peace for landâ€”you disarm, put down your weapons, and get rid of the threats to me and I will then give you the landâ€”the reverse is true: I have no commitment to follow through. Once youâ€™ve laid down your weapons, you have no threat.â€
Bueno de Mesquitaâ€™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. â€œIn 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 donâ€™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. Itâ€™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 thatâ€™s that.â€
As we have learned, “incentives matter”, in foreign policy just as in economics. Surely BDM’s proposal would at least improve the possibility of future cooperation. Will it take two generations of such policies to wash away enough of the Palestinian indoctrination of their young?
BDM founded Decision Insights Incorporated in 1981 and the New York consulting firm Mesquita & Roundell in 2003, but has been consulting independently for years for clients in the private sector and for a long list of governments:
…As one of the foremost scholars of game theoryâ€”or â€œrational choice,â€ as its political-science practitioners prefer to call itâ€”Bueno de Mesquita is at the center of a raging hullabaloo that has taken over some of the most prestigious halls of learning in this country. Exclusive, highly complex mathematically, and messianic in its certainty of universal truths, rational-choice theory is not only changing the way political science is taught, but the way itâ€™s defined.
To verify the accuracy of his model, the CIA set up a kind of forecasting face-off that pit predictions from his model against those of Langleyâ€™s more traditional in-house intelligence analysts and area specialists. â€œWe tested Bueno de Mesquitaâ€™s model on scores of issues that were conducted in real timeâ€”that is, the forecasts were made before the events actually happened,â€ says Stanley Feder, a former high-level CIA analyst. â€œWe found the model to be accurate 90 percent of the time,â€ he wrote. Another study evaluating Bueno de Mesquitaâ€™s real-time forecasts of 21 policy decisions in the European community concluded that â€œthe probability that the predicted outcome was what indeed occurred was an astounding 97 percent.â€ Whatâ€™s more, Bueno de Mesquitaâ€™s forecasts were much more detailed than those of the more traditional analysts. â€œThe real issue is the specificity of the accuracy,â€ says Feder. â€œWe found that DI (Directorate of National Intelligence) analyses, even when they were right, were vague compared to the modelâ€™s forecasts. To use an archery metaphor, if you hit the target, thatâ€™s great. But if you hit the bullâ€™s eyeâ€”thatâ€™s amazing.â€
Lerner closes with “A sample of Bruce Bueno de Mesquitaâ€™s wilderâ€”and most accurateâ€”predictions”
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. â€œThe model identified Andropov, who nobody at the time even considered a possibility,â€ 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 Chinaâ€™s hardliners would crack down harshly on dissidents.
Predicted Franceâ€™s hairâ€™s-breadth passage of the European Unionâ€™s Maastricht Treaty.
Predicted the exact implementation of the 1998 Good Friday Agreement between Britain and the IRA.
Predicted Chinaâ€™s reclaiming of Hong Kong and the exact manner the handover would take place, 12 years before it happened.
For readers interested in a deeper assessment of Bueno de Mesquita’s work, see his 17-page CV at NYU [PDF].