The Evolution of a Modern State

CG TrendsViolence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History is the latest book by Nobel prize winner Douglass C. North and fellow economists John J. Wallis and Barry Weingast. The book addresses the key question of development: how do societies move from personal to impersonal economic exchanges where individuals can achieve more through peaceful cooperation and entrepreneurship than violent conflict? In other words, the authors trace how societies move from “natural” states with so-called limited access orders, where the solution to violence lies in complex layers of personal relationships and rents, to “modern” states with open access orders where the entry into political and economic spheres is open to all citizens and incentives for violence are curbed by stable and perpetual governance institutions.

This question is far from a purely academic inquiry. In fact, it is at the very core of today’s development debates on what makes democracy last and deliver. Most developing countries remain “natural” states where elections, if they take place, tend to be a tool of political control, raising the stakes of electoral competition to the winner-takes-all level. It is enough to think back on the 2007 Kenyan elections to understand how easily those high stakes can translate into social unrest. The nature of politics in developing countries is closely mirrored by how their economies work. They are often dominated by crony relationships, rents, and a zero-sum rationale that prevents the benefits of economic growth from being accessible to a large part of the population.

The authors stress, therefore, that modern political and economic development are two sides of the same coin because political and economic competition sustain each other and because a successful economic transition ultimately has to be negotiated through political means. All too often reforms in developing countries falter because the attempts to create functioning democracies and market economies fail to account for the underlying logic of a natural state: lack of perpetuity of institutions and lack of impersonality in political and economic interactions.

There is no linear, singular path for a change away from natural state to occur. Yet incremental change can be achieved. What’s needed is strengthening the institutions of impersonal governance and building coalitions of reformers who advocate for transforming the privileges that in a natural state are accessible only to the elites (such as the rule of law or property rights) into rights that in a modern state are possessed by all citizens.

One Response to The Evolution of a Modern State

  1. The dilemma of rural population’s lack of property rights is directly related to the lack of mechanism to determine the value of commercial land production in relation to the consumption of a given commodity in the major population centers beyond self subsistence.

    The absence transparent national market information of commodities consumed in all population centers and that would put a price tag on commercial property is rendered useless. Under this scenario, the commercial value of land can not be determined, the cost and benefit of engaging in production of any commodity can not be ascertained, and most importantly the coordination of market players and concerned interest groups can not be possible.

    The formation of any trade association is based on the long term interest of the members and should be on solid facts in the market, not by some theoretical assumptions.

    That being the case, Ghana’s case is only promising in that, the elected leaders would be responsive enough and would advocate on behalf of a particular interest groups or to the need of the general public with out the facts in the market.

    Formation of Associations with out the members having equal access to information, even the perception of not having it can not bare fruits. After all, in the absence of public information from independent sources, and given the political reality of most countries’ dysfunctional markets wealth distribution, we can see a formation of dysfunctional association not a transparent one.

    Pubic market information is the glue that draws together all parties to form transparent associations, any thing short of that would loss confidence so fast it would be associations of who ever collide with the political power.

    Granting land to foreign investors is one of the many corruptions that came about keeping the rural population ignorance about the value of their land.