Why Nations Fail
question
When is State centralization okay?
Erwin
Aug 21, 2016 11:07PM
I loved this book, and I'm trying to understand the author's thesis better.
While the author mostly points to 'inclusive political institutions' as a good thing (giving the people more power), he seems to make an exception when it comes to places where there are massive ideological divides between separate cultural/racial groups. There, the people of one group are likely to highly distrust the opposite group. He seems to suggest that, in these cases, the government must clamp down on unrest and violence (and bring everyone to the table to hash things out, so to speak) and he advocates 'state centralization'.
To me, this appears to contradict with his general favoring of democracy and "what the people want" rather than having a government that is too powerful.
Any thoughts on this? Where do you draw the line?
While the author mostly points to 'inclusive political institutions' as a good thing (giving the people more power), he seems to make an exception when it comes to places where there are massive ideological divides between separate cultural/racial groups. There, the people of one group are likely to highly distrust the opposite group. He seems to suggest that, in these cases, the government must clamp down on unrest and violence (and bring everyone to the table to hash things out, so to speak) and he advocates 'state centralization'.
To me, this appears to contradict with his general favoring of democracy and "what the people want" rather than having a government that is too powerful.
Any thoughts on this? Where do you draw the line?
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My take on it is that a strong state is required to protect and enforce the fundamentals of inclusive society being: an all embracing electorate; freedom of the press; independence of the police/armed forces and judiciary; strong contract and property laws; freedom of religion, association and protection of human rights. A strong, central state is the glue that binds these aspects together. I don't see any contradiction with this.
Hey Erwin...
I am no expert in those matters, but thought I could share some thoughts...
You are right, it seems like a contradiction at first, but it is resolvable. Here is what I think the authors are trying to convey: centralized government is a prerequisite (a necessary condition) for prosperity, but not a sufficient condition. The factor that then complements this first necessary condition, is the role this central government plays; whether extractive playing an authoritative role, or an inclusive role to consolidate the different views of the population.
Places with massive ideological divides (as in the example of Somalia that the authors present) appear to fit the inclusive democratic model given the coexistence of multiple ideologies, but that is not the case in actuality. Instead it is better compared with multiple neighboring waring nations, but at micro scale instead. That is, those tribes exist as micro-nations (micro-countries) but with shared geographical occupancy (soft political boarders instead of the more conventional that we are all familiar with). Now, prosperity, as per authors, require certain stability and guarantees such as enforcement of property rights, and the ability to collect ones own fruits instead of those fruits going wasted. This in turn is satisfied by the modern democratic inclusive institutions. On the other hand, ideologically divided areas lacking a centralized government, means a coexistence of equal powers without an entity to ensure consolidation of views when they diverge. This means a long term vision is less likely to exist, let alone be adhered to if it were to exist, leading to a lack of certainty, which makes people less likely to invest (after all, investment is all about the long term, let it be on personal education, or on country scale corporate development).
Now, why do extractive institutions are more likely to achieve some prosperity compared to those without a central government? Because, future is more certain, and the government can ensure some of the requirements to prosperity. However, the extractive model is not scalable, and eventually, it fails to deliver anymore output.
I think the idea is strongly connected to scalability, sustainability, and sustainable system models, i.e. distributed systems are easier to scale and its scalability is often more sustainable than centralized systems, however, scalability and sustainability of distributed systems is dependent on the existence of some central authority to manage contention, and to lead and focus efforts.
I am no expert in those matters, but thought I could share some thoughts...
You are right, it seems like a contradiction at first, but it is resolvable. Here is what I think the authors are trying to convey: centralized government is a prerequisite (a necessary condition) for prosperity, but not a sufficient condition. The factor that then complements this first necessary condition, is the role this central government plays; whether extractive playing an authoritative role, or an inclusive role to consolidate the different views of the population.
Places with massive ideological divides (as in the example of Somalia that the authors present) appear to fit the inclusive democratic model given the coexistence of multiple ideologies, but that is not the case in actuality. Instead it is better compared with multiple neighboring waring nations, but at micro scale instead. That is, those tribes exist as micro-nations (micro-countries) but with shared geographical occupancy (soft political boarders instead of the more conventional that we are all familiar with). Now, prosperity, as per authors, require certain stability and guarantees such as enforcement of property rights, and the ability to collect ones own fruits instead of those fruits going wasted. This in turn is satisfied by the modern democratic inclusive institutions. On the other hand, ideologically divided areas lacking a centralized government, means a coexistence of equal powers without an entity to ensure consolidation of views when they diverge. This means a long term vision is less likely to exist, let alone be adhered to if it were to exist, leading to a lack of certainty, which makes people less likely to invest (after all, investment is all about the long term, let it be on personal education, or on country scale corporate development).
Now, why do extractive institutions are more likely to achieve some prosperity compared to those without a central government? Because, future is more certain, and the government can ensure some of the requirements to prosperity. However, the extractive model is not scalable, and eventually, it fails to deliver anymore output.
I think the idea is strongly connected to scalability, sustainability, and sustainable system models, i.e. distributed systems are easier to scale and its scalability is often more sustainable than centralized systems, however, scalability and sustainability of distributed systems is dependent on the existence of some central authority to manage contention, and to lead and focus efforts.
I think one of the problems with this book is that they don't draw the line anywhere. They leave their concepts abstract and diffuse, even citing examples that are out of context and/or temporary.
A more thorough study that was meant to do something more than cheerlead would draw a sort of simple supply/demand table where goods and services are distributed versus authorities siphoning off economic resources in order to protect that distribution process. Where more is siphoned off above the equilibrium point, you have "extractive economic/political institutions" and where it is below the equilibrium point you have non-governmental institutions doing the same.
Finding that equilibrium point, of course, is easier said than done, but it would make for a more rigorous academic study.
A more thorough study that was meant to do something more than cheerlead would draw a sort of simple supply/demand table where goods and services are distributed versus authorities siphoning off economic resources in order to protect that distribution process. Where more is siphoned off above the equilibrium point, you have "extractive economic/political institutions" and where it is below the equilibrium point you have non-governmental institutions doing the same.
Finding that equilibrium point, of course, is easier said than done, but it would make for a more rigorous academic study.
I agree with @simon here; centralization is the first step. If there is none, there is no hope. However, with only the centralization and no counterbalance institutions or groups, that nation is also doomed.
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