This document summarizes Bruce Bueno de Mesquita's institutional explanation for the democratic peace theory. It outlines how Mesquita uses a game theoretical approach to argue that democratic leaders, due to having larger winning coalitions, allocate more resources to public goods like defense spending. This makes democracies try harder in wars and only fight when they anticipate victory. As a result, democracies are less likely to fight each other and more likely to initiate wars against non-democratic states. The document also reviews eight empirical regularities of the democratic peace and discusses how successfully Mesquita's model explains them based on the incentives and constraints facing self-interested leaders in different institutional systems.