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.