Economix Blog: Casey B. Mulligan: Was Qaddafi Overpaid?

Casey B. Mulligan is an economics professor at the University of Chicago.

By most measures, the former dictator Muammar el-Qaddafi looks to have been overpaid, even as dictators go.

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Colonel Qaddafi’s wealth had recently been estimated in the tens of billions. But it now looks as though he could have been worth more than $200 billion.

Obviously, $200 billion, or even $10 billion, is a lot for wealth for one person. But $200 billion is but a fraction of Libya’s national wealth. Its proven oil reserves alone total 46 billion barrels. If those barrels were valued at $100 each, the oil reserves alone would be $4.6 trillion, or 23 times Colonel Qaddafi’s wealth.

In my research on dictators and their public finances, I estimate that, on average, dictators were taking about 3 percent of their nations’ incomes in the form of excessive taxation. Judging from Colonel Qaddafi’s share of Libya’s national wealth, that’s about what he was taking.

Dictators typically spend a lot on the military in order to protect themselves from people who might want to take their lucrative jobs, which itself is a sure sign that a dictator is overpaid. Led by Colonel Qaddafi, Libya’s government spent more of the nation’s income on the military than the average dictatorship does. Libya also spent less of its national income on social security than the typical dictatorship does, although perhaps a bit more than an economically and demographically similar democratic country would.

Colonel Qaddafi’s regime was known to torture and execute its political enemies. So it’s clear that the citizens of Libya were sacrificing too much for their leaders.

What’s less clear is whether the next leaders of Libya will take less or offer better services for the citizens of Libya. Egypt’s experience since Hosni Mubarak shows that the overthrow of a longtime dictator does not by itself bring freedom or democracy. Libya has much more in oil riches than Egypt, and political opponents in Libya are likely to find that wealth worth a violent fight.

Let’s hope that a long, bloody Libyan civil war does not make Colonel Qaddafi’s “fees” for his longtime leadership look cheap.

Article source: http://feeds.nytimes.com/click.phdo?i=2b256c07d951e3e45b2cc8beeca5cd3e