The agonies continue at the LSE over the fact that it took Libyan money.

Here is the sensible memo which an unhappy Fred Halliday wrote on the subject in October 2009. It reads quite well now.

Here briskly defending what New Labour did by way of opening up to Libya is Lord Mandelson:

Our policy goal should be to do all we can, with others, to put such a country on to the path of transition. Opening up its economy, helping it to tap its natural resource wealth, deepening its integration to the rest of the world and stimulating domestic enterprise and business will spur the growth of aspiration, demands for freedom and the spread of pluralistic values in that society.

Contact with the outside world makes a population want more of what that world – its material goods and liberal values – has to offer. The next step is for them to organise in order to resist and weaken the tyrant’s power and, eventually, overthrow him and his regime as, hopefully, will happen in Libya and, in due course, Iran.

The sort of points made on either side of this argument (and the usual clamorous accusations of ‘hypocrisy’ which get flung in all directions in these situations) are all about a peculiarly difficult policy question: if there is a bad regime out there, how best to promote change?

First, you have to get over the argument that if foreigners want to brutalise each other, that’s none of our business. And the related argument that even if we want to do anything, we’ll be likely to mess up and make things worse.

All sorts of the usual policy points can be made to and fro on those ones. But let’s stipulate for the purpose of this blog posting that it just doesn’t feel quite right to do nothing when we see decent people attempting to stand up for the sort of rights we enjoy and being massacred by a tyrant.

So we decide that we do want to do something. But what is in practice likely to work against Bad Leaders?

I have written about the Bad Leaders phenomenon at some length here already. See this.

And this one, which looks carefully at the core weakness in Craig Murray’s utterances on Uzbekistan, where the only thing more deafening than his hoots of supposed moral outrage at anything involving ‘engagement’ with the Karimov regime is his studied silence on any clearly different policy way forward instead.

In this context the Gaddafi case is really interesting.

For years Gaddafi was a loathsome form of post-colonialist national socialist low-life, supporting terrorism in many different forms and showing off about it. Then came the overthrow of Saddam Hussein, and a furtive telephone-call to MI6 – Gaddafi would like to offer a deal.

And quite a deal it turned out to be. Not only did Libya work with Western governments to renounce various WMD programmes. It accepted responsibility for the Lockerbie state-sponsored terrorism bombing atrocity!

One of the most impressive Bad Leader policy shifts in modern times – had Milosevic offered such a grand bargain he might still be Serbia’s leader.

Bad Leaders may have a keen regard for their undeserving necks. But they also have their professional pride. And if they offer a deal they want to get something real in return. Not only the fact that they are not toppled. Recognition – acceptance – respectability – too.

And that was what we had to offer Gaddafi to clinch the deal. Sanctions were lifted and very quickly Libya started to be treated once again as a ‘normal’ country.

Not normal in the sense that we believed it behaved in a civilised way at home; it didn’t. But normal in the sense that we tried to deal with it as we would any other unhappy dictatorship, namely showing formal respect for its leaders while trying to look for ways quietly to promote better outcomes for ordinary Libyans.

Part of this process involves business deals. Sure we know that the local dictators will find countless ways to cheat their own people. Check out my first-ever LSE book review which has just appeared – cool timing. It looks at a book called Economic Gangsters which aming other things ingeniously tries to calibrate the extent and cost of top-level corruption in Indonesia.

Yes, big business deals enrich the regime. But yes too, they bring in to the regime’s structures unfamiliar new processes of accounting, lawyers, rules, standards, transparency and reputation which have to be taken seriously.

These ideas permeate out into the elite and beyond. People start to think about how life might be better if much more of their country’s processes were opened up and internationally legitimised. The top leaders start to modify their behaviour – no point in being too openly odious in the run-up to Davos.

Likewise scholarships and academic programmes. Yes, there’s a risk that if we bring plenty Libyan students to the UK to learn chemistry they’ll help develop WMD technologies when they go home. But yes too, they’ll see a completely different pluralistic academic and social atmosphere, their horizons will be far wider, they’ll ask questions, they’ll end up thinking differently about the world.

And then there are military and intelligence contacts. Yes, talking to the regime’s senior hoods somehow reinforces their prestige and power (bad). But engaging with them through visits and other programmes (including training) helps in a drip-drip way to spread better ideas and instincts among the next generation of leaders (hopefully good).

So there is a case for being stern and unyielding towards Bad Leaders: sanctions, threats, UN resolutions and the rest.

But experience shows (apartheid South Africa, Saddam Hussein, Cuba, N Korea, Milosevic, Lukashenko) that these policies drag on for many years with not much to show for them other than making the mass of people poorer for far longer. Not years but decades of fast compounding misery.  

So if isolation does not work, you end up with different sorts of engagement. All largely inglorious and risky, none offering any quick solution to the basic problem – the sheer Badness and tenacity of the Bad Leader concerned.

Stick v Carrot? Or a clever attempt to use both which is hard to sustain cleverly, and risks looking ridiculous when the bad donkey eats the carrot but stays put? A timless and unanswered question.

So I have no problem in principle with the LSE taking Gaddafi’s money to run various programmes which it otherwise might not have run. The more so if that was part of an accepted wider international schmoozing of the Gaddafi regime which followed the end of those WMD programmes, and a significant opening-up of Libyan society which went along with all that.  

But there are firm lines to be drawn.

And if LSE cut corners in approving sub-standard academic work from top Libyans as part of the implicuit deal to get that money, we were not spreading good practice to Libya – Libya was spreading very bad practice to us.