A Couple of Provocative Thoughts

Don't provoke him. You wouldn't like him when he's angry.

A few weeks ago, Nick Eubank wrote a piece about Somaliland in the Guardian’s Poverty Matters blog. Somaliland is an interesting one – it’s a state that is not officially recognized and therefore in receipt of less aid than would be expected (though it is incorrect to assert, as he does, that it receives no foreign aid), but is performing well above reasonable expectations. They have a pretty well-functioning democracy, biometric passports – like Lee, I still can’t get over this – and pretty good economic performance.

Eubank suggests that it’s the very lack of aid and subsequent development of tax structures that has led to Somaliland’s good performance, a view to which I have some sympathy. I’ve written in the past about why developing taxation systems is crucially important for all developing countries and why it tends to be difficult. If a side-effect of Somaliland’s lack of access to aid is being forced to be more representative and more developmental, could there possibly be a benefit to restricting rather than increasing aid volumes?

It’s a provocative idea, because it flies in the face of almost everything we’re led to believe about development and levels of development funding, but as a thought experiment, it’s worth considering. It would be likely to yield specific benefits:

  • Most obviously, it incentivizes the creation of a viable tax regime with the benefits of accountability, representation and responsiveness that issue from one
  • It also creates far more pressure to achieve concrete and valuable results than any system of performance assessment – strictly limited aid volumes makes failure far more costly
  • Ownership would take a big boost. The biggest boon to local ownership of the aid agenda would be the ability and necessity to refuse aid packages that are not wanted. If bad aid or aid out of line with the local development vision replaces good aid, the incentive to exercise ownership of the agenda and refuse the aid is that much higher
  • A limited volume of aid would mean that the limited management capacity of local institutions is not stretched over hundreds of projects and programmes (as is the case now), but focused on a few tightly prioritized programmes, with consequent benefits for implementation.

Offsetting these benefits is the obvious drawback that much of what needs to be done could not be financed with a strict aid ceiling. The value of the thought experiment is not to assess whether we should cap aid, but to see what benefits it would bring so we can work out how to generate these benefits without limiting aid volumes. The hardest two to incentivize without some resource constraint are the improved ownership (which really requires that local institutions to refuse aid far more than they actually do) and the management effects. Suggestions welcome.

Staying in the region, Chris Blattman also linked to a paper suggesting that Somalia was better off without a state. While the writer of the original paper seems to be a libertarian (and somehow the headline ‘Libertarian Dislikes Government’ isn’t all that shocking), it does make an interesting basic point: the correct counterfactual when we consider poorly governed or chaotic states is not a ‘good’ Government, but a ‘different’ one. This is something to bear in mind when we consider countries with corrupt, dictatorial or ineffectual Governments. Very often it’s not the specific leadership or political party that is at the root of bad governance or decline, but the structural characteristics of their rule: their relationship with the opposition, their relationships with the public, their ability to govern effectively and the options open to them. In very different contexts I’ve argued this for Malawi and Zimbabwe. In Malawi, the same leadership was fine in one political context and dictatorial in another. In Zimbabwe, the temptation to lay all blame at the feet of a very convenient (and abhorrent) villain blinds many to the complex roots of his crimes and Zimbabwe’s decline. The saddest thing is that this point is often neglected even by immensely powerful decision makers – the invasions of Afghanistan and Iraq both show marks of this error.

Going back to the original article, is there a case to be made for statelessness when the Government is predatory? The argument is strongest in the static view, comparing a bad state and statelessness. The more dynamic the view taken, where we consider how tyrannical or corrupt regimes can become effective ones, the less this view makes sense, though it’s also true that plenty of tyrannical regimes didn’t evolve but were overthrown. Again, the thought experiment of whether some developing countries would be better off stateless is most valuable in focusing our attention on the long term needs and real dynamics of state building – not just in terms of building institutions but understanding how bad or predatory institutions can evolve into good ones. It’s happened in many countries, and links back to the questions of accountability, representation and taxation discussed above.

Links about States

Almost all states are artificial to some extent...

The referendum in Southern Sudan has brought the issues of state formation, state weakness and statelessness back to mind for a lot of bloggers and writers about development. Chris Blattman has posted about what sounds like a really interesting book about statelessness here. Blattman points out that statelessness is often a choice, rather than a passively received condition, and goes on to say:

Why? Well, states historically (and in too many contemporary cases) have been coercive and extractive. Evading rather than entering states has often been the most sensible way to improve well-being. Only recently have (some) states become less predatory. (Or perhaps they remain as destructive in their assimilation, but the lure of consumer products has become too great?)

This is a very germane debate for scholars of Africa, because statelessness was found in large parts of Africa right up to the colonial period. However, it’s important to understand that statelessness doesn’t necessarily mean chaos or the absence of authority, or even of taxation in some forms. Before large states were formed through warfare, colonialism or creeping expansion, much of West Africa was made up of self-governing groups of villages, based on kinship and familial ties and led by chiefs. In Somalia today, though it is functionally stateless in large part, the Islamic Courts movement has support because it provides a substitute source of authority and justice.

For this reason, I’m quite interested to read this book and to assess the second part of Blattman’s statement above. States do not have the monopoly on extractive or coercive behaviour. However, they do formalise such behaviours over larger areas and multiple subject/citizen groups and have other characteristics that distinguish them from tribal authority. They also provide services and solve the collective action problem through coercion. That’s why it’s so interesting to see when and why some groups consider statelessness to be their best solution.

Elsewhere, Aid Watch has questioned whether after Sudan, other states in Africa should redraw their borders and goes on to point out that ‘artificial states’ are prone to worse development outcomes. I’m not a big fan of either of these lines of thought, even though I freely acknowledge that the borders created by colonialism were arbitrary. What Easterly and gang don’t recognise is that virtually *all* states were formed by conquest or other forms of coercion and are thus to some extent arbitrary. At some point in their history virtually every state in the world that is not an island-state has created new boundaries for itself.

This raises the question of what a natural state is, as opposed to an artificial one. Is it one that was never colonised? Ethiopia was never colonised, but it did rather a lot of colonising itself. The Axumite empire conquered lands to the South and North of it’s original base, and subjected new communities to its rule. There is no shortage of archaeological and written evidence to this end, but it was more than a thousand years ago. Does time make it a natural state? Perhaps, but even then Eritrea seceded only in 1993. If secession makes ‘natural’ states, what of the United States of America? Is that an artificial country, given the South once wanted independence?

I’ve written a bit about states and statebuilding in the past. In this post, I looked at why states are important for development, and some reasons why they have been difficult to form in Africa (my thought on this has evolved since I wrote this). Here I wrote about how some African leaders succeeded in creating unified states out of the arbitrarily drawn boundaries of colonialism. And finally, to introduce a little more complexity into the idea of state strength and failure, a quote from Chris Bayly on how states can be simultaneously strong and weak.

On the Weakness of States

Did you ever see the original hulk TV show? They basically dusted Lou Ferrigno with green powder and asked him to growl. He was still more convincing that Edward Norton.

Weak or Strong?

It was not the case that old states were uniformly ‘weak,’ more that they husbanded their moral and physical authority for specific tasks… Where complex bundles of royal privileges and powers had come into existence, there was often a tendency for them to be broken up, becoming part of the patrimony of some other prince or noble. Kings and emperors often found it lucrative and convenient to ‘farm out’ their rights to the highest bidder…

In China… initially the emperors had been content to cede their power in one area in order to strengthen it elsewhere. In the longer run, however, the decay of these imperial functions gravely compromised the regime’s legitimacy. Recent work on the West African Asante [one of the great pre-colonial African kingdoms] has also shown that this aspiring centralized power was severely limited by local feudatories and lineage groups….

So Government in all of these great states was often something of a trick of the light. State power was powerful and purposive in defined areas, though constant vigilance was needed to stop it seeping away to magnates and local communities. Elsewhere it was patchy and contingent. Over large areas it was deliberately not exercised at all…In the monsoon areas of Asia where great kings vaunted their magnificence, warfare and tax gathering regularly came to a halt when the roads annually became impassable. The state could only deploy a small number of officials or exercise royal justice in particular cases. Everywhere, therefore, the panoply of state and imperial power rested in the longer term on the co-option and honouring of local elites or self-governing local communities.

Every time I open The Birth of the Modern World, I read a passage in which Chris Bayly exposes the complexity of historical reality and dangers of simplification. In this example, he looks at the period leading up to around 1800, in which states were beginning to take modern form. In examining the phenomenon of weak or strong states, Bayly emphasises that states are not static over space, time or function. As such, naming a state ‘weak’ or ‘strong’ may simply cloud the real story, that states choose to exercise power in some areas and not others, not always in the best long-term interest of the state itself and often simply in response to basic opportunity or aims that owe more to symbolic rather than rational ends. The Great Russian Empire existed primarily on paper, for example, with large swathes of land ungoverned – almost a textbook example of a ‘weak’ state. Yet when the state was called upon to exert its authority, it always found the means to, at least until 1917.

We talk a lot about weak states now, and even of ‘failed’ states. These are not new ideas nor new phenomena. When we think about modern failed states, we need to bear in mind that for most there are functions in which they are strong and there are areas in which they govern effectively; it’s from these that strategy on how to incorporate the rest of the nominally governed area must be generated. This may involve subjugation or devolution or both – states are about the exercise of moral and physical authority, which is not always pleasant to witness or be subject to. The process by which a patchily strong state becomes a uniformly strong state is rarely without severe conflict.

In the extreme cases, where ‘states’ govern a few square miles and little else, we are in uncharted territory. Historically, these have never succeeded, and gave way to successor states or anarchy. Our attempts to forestall this may be futile or we may find a way to build a new moral and physical authority to reinforce the state. Given that outside interference almost always involves an abdication of moral authority in the eyes of an insular or jingoistic public, it’s may be that only force can support these.

“Pay Me Money – Pay Respect; Don’t Insult My Intellect”

A different kind of cash transfer...

A different kind of cash transfer...

Owen Barder’s newest Development Drums features Mushtaq Khan and Daniel Kaufmann debating corruption . I haven’t heard it yet (a combination of a temperamental internet connection and a hearing problem that makes podcasts less than ideal for me), but I know their views on the issue, and I imagine it will be brilliant and interesting.

I studied under Mushtaq during my Master’s degree. His was probably the best lecture series I ever attended. His work covers a range of issues relating to the development of capitalism, taking a strong political economy and historical approach, but the area in which he’s probably received most attention is corruption. His arguments are extremely persuasive, but there are elements to the corruption issue that are best understood from outside the paradigm of economics (even political economy) that merit further considerations.

Even a brief consideration of his ideas shows their merit, though. There are two central elements to Mushtaq’s argument about corruption. Firstly, he argues that corruption itself is not necessarily bad for development. The second and more important argument is that different kinds of corruption obtain in different kinds of polities, and some specific patterns of corruption are symptomatic of a polity is structurally impeded from a transition to capitalism and rapid economic development.

England provides an example of the first element to his argument. There, agrarian capitalism was one of the pre-conditions for the industrial revolution. It arose from the enclosures movement, in which landowners essentially annexed public land for their personal use. Rule of law was manipulated for the benefit of a select group, in turn providing material benefits to those with the power to ratify this. Yet, the enclosures movement made a significant contribution to English economic development, allowing for the efficiency gains required to feed a nation, and also created a class of landless labour, who played a key role in the industrial revolution and the transition to true capitalism. The corrupt practices of the landed and powerful contributed to an economic transformation.

Of course, there are also many economically stagnant or failing countries that are characterized by corruption. This is where the second element of Mushtaq’s argument about corruption comes into play: it is the underlying socio-political structure that determines the pattern and effect of corruption and explains their poor performance.

Much of Sub-Saharan Africa is characterised by complex patron-client networks, in which a number of groups vie for the patronage of a Government with a weak power base vis-à-vis these groups. The Government cannot cut the corrupt relationships that exist between them and any of these groups in order to aid economic transformation, as the spurned group frequently has the political power to successfully challenge the Government. This contrasts sharply to patterns prevalent in most currently developed countries at the time of their transition to capitalism. In these cases, the crucially important aspect was that in the relationship between the state and one or more key economic actor, power was asymmetric. For example, South Korea’s Government was in a position of unchallenged power vis-à-vis the Chaebol, a legacy of WW2 in which they were seen as collaborators. As a result, Government was in a position to offer subsidies (and accept bribes), but more importantly, it was able to remove these subsidies without political repercussions. This meant that if a conglomerate was unable to meet the targets that Government set, it could easily be disciplined through the removal of subsidies. Patronage was focused and contributed to economic transformation and consolidation of resources in the most productive hands.

Even much abridged, this summary of Mushtaq’s position demonstrates some of the most valuable insights he brings to analysis of corruption (and indeed development more broadly). He homes in directly on the power relations and political realities that underlie the way Governments and polities in the broader sense function; and he makes a clear and persuasive case as to how this distribution of power and political clout can help or hamper the economic transformation that must stand at the heart of any sustainable development process.

Despite this, there is another approach to the problem of corruption that also needs to be considered, one that doesn’t invalidate his arguments, but rather introduces new complications, focusing on the role of the state and the effects of corruption on state – subject/citizen relations.

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We Can Work It Out! We Can Work It Out!

Do we think as one, or are we just joined by circumstance?

Do we think as one, or are we just joined by circumstance?

I recently posted a rambling trail of thoughts about the difficulty of state building in much of Africa. It was a generally bleak assessment: historical circumstances have made state-building difficult due in large part to the historical importance and continuing primacy of sub-national forms of identity. I also suggested that without a strong national identity and state, it’s difficult to transform the economy in the ways needed to develop rapidly.

Having said this, there are examples of countries and leaders within Africa who have explicitly pursued nation-building with some success, and its worth looking at these examples to see what kind of impact this has had on development. The two examples I am most familiar with are Malawi under Hastings ‘Kamuzu’ Banda and Tanzania under Julius Nyerere (Kenneth Kaunda also sought to rule Zambia using the ideology of ‘One Zambia, One Nation’, but I’m less familiar with the ins-and-outs of Zambian history).

What’s most interesting about these examples is how they pursued nation-building policies and why they haven’t gone on to more rapid development than the rest of Africa if state- and nation-building really is important

Nation building in Malawi and Tanzania took similar forms, but through rather different methods. Unity of state and nation was a key ideological component of Hastings Banda’s vision for Malawi in the thirty-odd years he was Life President, and he pursued it vigorously. As a national language, he selected the language spoken by the Chewa, which at the time was considered simply to be a dialect of Chinyanja. Giving it the name ‘Chichewa’, in 1968 the Government began an aggressive campaign suppressing other languages. Books published in Chitumbuka, Chiyao and Chilomwe were suppressed and banned; all instruction was given in Chichewa and English; and there was even a national ‘Chichewa Development Board’.

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A confusion of nations; a violence of states

If only state-building could be this easy...

If only state-building could be this easy...

What is the unit of development? Do we expect individuals to ‘develop’ their own personal circumstances? Or shall we choose from a menu of different levels: villages, geographical regions, nations, or states?

Let me illustrate how undecided we seem to be: Jeffrey Sachs’ famous Millennium Village Projects operate at the level for which they are named. Despite this, the most commonly used measures of development are calculated at the level of internationally recognised states: Gross National Income per capita and the Human Development Index. The results of development work over the last 50 years can be depressing at this level, but someone (Lant Pritchett? Help me out – I’ve forgotten!) pointed out that if we weight progress by population the picture is rosier thanks to India and China. This measures development at the individual level, even if we are not arguing that’s where it stems from. Yet here we run into more problems: it can be legitimately argued that India is too large, too diverse to be treated as one entity and experience. In Africa, you do not need to search hard to see division between, for example, the ‘Yoruba Nation’ in the West of Nigeria and the Hausa in North, or the Igbo.

These are not idle observations about analytical constructs. They have practical implications for policy and for understanding the constraints to development and the impact of the West’s involvement on the subcontinent and Africa in particular.

I believe that the process of development must occur at the level of the state, but that this level of development does not exist in isolation. At the level below the state, how the regions, villages, tribes and other subdivisions within a state interact and behave can determine the success or otherwise of a state-level development process. One level up and the larger geopolitical context of the state can hem in or expand the possibilities of development. Amidst this, the state is of crucial importance due to its administrative and institutional roles. This, however, opens up a set of profound problems that we must address: why do so many states fail to function, and why are so many states fracturing into smaller states?

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