When States Fail

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From The Quarterly Journal of Austrian Economics 8, no. 3 (Fall 2005): 97–99.

When States Fail: Causes and Consequences. Edited by Robert I. Rotberg. Princeton, N.J.: Princeton University Press, 2004.

Do weak governments around the globe merit assistance? The premise of When States Fail: Causes and Consequences is that without strong government, society devolves into chaos. Sponsored by the Harvard University Failed States Project, this edited volume contains fourteen chapters, most of them written by political scientists. Not all authors come to the same conclusions, but they agree on most issues. Thus, I will treat the arguments collectively. The writers argue that the United States and other nations have a positive role to play in helping at-risk governments become strong.

That most contributors are mainstream political scientists rather than Austrian economists becomes evident quickly. As the old saying goes, when all you have is a hammer, everything starts looking like a nail. In the case of these political scientists, they clearly believe that scientifically designed government institutions are needed to solve all of the world's problems.

A small minority of the contributions are interesting and thoughtful; of the remainder, the best chapters are the ones that do not say much. The arguments will be convincing to those who believe in increasing state power and those who believe that groups such as the United Nations should be involved in governmental affairs around the globe. The arguments will be unconvincing to anyone with the slightest appreciation for free markets or self-governance.

Although these academics pay some lip service to the importance of markets, they argue that society crucially relies on strong states. As such, they want to find ways to make states strong. The arguments rest on certain basic assumptions that the authors unfortunately never justify. Nowhere in the book do they offer evidence that having a failed state or a weak state is bad. At a few points the authors try to provide evidence for this hypothesis, but rather than attempting to create an objective measure of the strength of states and then attempting to correlate that with measures of results, they simply choose countries with bad outcomes and then define those countries as having weak states. When high mortality, low literacy, and low life expectancy rates plague a country, the cause, according to these authors, is that the government is not strong enough. Never do they consider the possibility that these bad outcomes could be due to overly strong states.

The Soviet Union was certainly a very strong state, and it effectively killed millions of its citizens (Rummel 1994). If the authors of this book wish to defend their simple hypothesis that strong states are good, they would need to ignore the evidence regarding those deaths or counter with an argument about how the Soviet Union was actually a weak state. Alternatively, they could start adding other variables that only certain types of strong states are good, but these essays appear to equate strength and goodness without reservation. The volume is not about promoting economic freedom; it is about promoting strong states.

The book cites eight countries as having failed or collapsed states and three dozen as having weak states. Economic Freedom of the World by Gwartney and Lawson (2004) includes data for twenty of these countries. If the contributors in Failed States had looked at that data, they could have seen that these nations' median economic freedom score is 5.6 which is among the bottom third (i.e., least free) countries in the world. These countries receive particularly bad scores for impact of minimum wage (3.9), business regulation (4.2), and government enterprises and investment as a share of gross investment (3.4). Does this look like a problem of weak governments or one of overly intrusive governments?

In addition to assuming that weak states cause bad outcomes, the authors never consider the possibility that good outcomes can occur without strong states. When a country has good results, they simply assume that the country has a strong state. Yet history does not seem to demonstrate this point. The government in seventeenth century Holland was highly fragmented (Stringham 2003, p. 329), and one would think it should be classified as weak. In addition, the government in early nineteenth century America was certainly not as strong as the U.S. government is today (Hummel 1996), and it too might be classified as weak. In both of these cases, however, the absence of government interference enabled the market to flourish. Historical work by economists such as Benson (1990) and Clay (1997) shows that markets require little more than government getting out of the way.

The authors' treatment of Somalia is particularly puzzling. The Somali government failed in 1991, and, after a brief occupation, troops from the United States and the United Nations left in 1993 and 1995, respectively. For the past decade the residents of Somalia have lived with virtually no government (Leeson and Stringham 2005). Throughout When States Fail the authors consider the situation in Somalia to be especially bad. Yet, it turns out that the writers judge Somalia to be bad simply because it lacks a strong state. A recent study by two economists at the World Bank (Nenova and Harford 2004) documents that Somali anarchy is not as chaotic as most government advocates would assume. Despite the absence of government entrepreneurs provide electricity, water, air travel, schools, and courts. Investment in areas such as telecommunications has notably increased: Somalis now pay telephone rates well below elsewhere in Africa, they have 1.5 times more phones per capita than in neighboring countries, and they have ten times as many people with phones than when they had government. The situation is admittedly not perfect. The authors in When States Fail assume that "Somalia would have fared better" (p. 162) had international governments intervened more. If only the United States and the United Nations had continued occupying Somalia, the authors want us to opine.

In the future, When States Fail tells us, the United States or United Nations can help states from failing by helping them strengthen police (p. 38), disarm native populations (p. 170), increase welfare programs (p. 176), and enact global gun control (p. 128). If anyone knows of a recipe more at odds with the principles of the American Revolution, let me know. Had the advice of the Harvard University Failed States Project been heeded two and one quarter centuries ago, the failing colonial government would have been rescued, and America would still be under British rule.

Lest any readers think I am being unduly harsh on a group of well-accomplished scholars, let me give an example of the level of scholarship in this volume. Harvard University's Dr. Donald Snodgrass gives this advice to countries after a crisis: "After a brief period of rapid catch-up growth, sustained GDP growth at 5 percent or better should be attained over a number of years" (p. 260). After that: "Infant, child, and maternal mortality should be reduced, life expectancy lengthened, and illiteracy abolished" (p. 262). Surely no one would oppose such goals, but this Harvard scholar acts as if all government needs to do is press a button. Does anyone seriously believe that government has the ability to choose a growth rate? Given that illiteracy has never been abolished in any nation, including the United States, does Snodgrass seriously believe that illiteracy can be abolished in countries that have so many problems?

I am reminded of the famous French socialist Charles Fourier, who promised that under socialism: "Men will live to the age of 144 . . . the sea will become lemonade and wars will be replaced by great cake-eating contests between gastronomic armies." The political scientists writing in When States Fail are peddling the same utopian snake oil under a different package. All we need to reach Nirvana is to create strong governments, they say. Should we believe them?

References

  • Benson, Bruce. 1990. The Enterprise of Law. San Francisco: Pacific Research Institute for Public Policy.
  • Clay, Karen. 1997. "Trade Without Law: Private-Order Institutions in Mexican California." Journal of Law, Economics and Organization 13: 202–31.
  • Gwartney, James, and Lawson, Robert. 2004. Economic Freedom of the World: 2004 Annual Report. Vancouver: Fraser Institute.
  • Hummel, Jeffrey Rogers. 1996. Emancipating Slaves, Enslaving Free Men: A History of the American Civil War. Chicago: Open Court.
  • Leeson, Peter, and Edward Stringham. 2005. "Is Government Inevitable? Comment on Holcombe's Analysis." The Independent Review 4: 543–49.
  • Nenova, Tatiana, and Tim Harford. 2004. "Anarchy and Invention: How Does Somalia's Private Sector Cope without Government?" World Bank Public Policy Journal 280: 1–4.
  • Rummel, Rudolph. 1994. Death by Government. New Brunswick, N.J.: Transaction Publishers.
  • Stringham, Edward. 2003. "The Extralegal Development of Securities Trading in Seventeenth Century Amsterdam." Quarterly Review of Economics and Finance 43: 321–44.

September 15, 2006

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