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  • Writer's pictureLouis Putterman

Why a well-functioning government is critical for our quality of life

The economic theorist and political economist Daron Acemoglu of MIT and political scientist James Robinson of the University of Chicago have published a new far-ranging book, The Narrow Corridor: States, Societies and the Fate of Liberty. Their goal is to revisit the issues raised in Thomas Hobbes’ famous book Leviathan and ensuing treatises on the nature of government by political philosophers including John Locke and American founding fathers Jefferson, Madison, and Hamilton, while taking into account more than two additional centuries of evidence and a much broader global canvas than had been available to the earlier thinkers.

Having witnessed the chaos unleashed by the execution of an English king and the ascension to power of the anti-royalist Oliver Cromwell, Hobbes argued that societies are doomed to suffer from incessant violence and conflict in the absence of a strong state, which he dubbed the Leviathan after a sea monster mentioned in the Bible.

Locke and the Enlightenment thinkers who followed his lead agreed that a strong state is required to achieve order, but they argued that not only should that state’s authority rest on the consent of those ruled by it, but also any given holder of the reins of state power should serve at the pleasure of the citizens and be answerable to them through a variety of checks on the arbitrary exercise of power.

A lot’s happened in the world since the days of Hobbes and Locke. Having mastered the navigation of the seas in which the original leviathan had lived, even the wider oceans beyond the stomping grounds of their Mediterranean-bound ancestors, monarchically ruled European countries including Spain and Portugal overthrew the existing state and non-state societies of North and South America. Before long, England and France expanded the epoch of European colonization into South Asia, throughout the continent of Africa, Australia, and New Zealand, and into large parts of southeast Asia and the Middle East. Northern European countries and their demographic offshoots in North America and Australia at the same time began the journey towards building the world’s first democracies with a dramatically broadened franchise, and industrial production arrived and revolutionized economic life.

Then, Europe fought two world wars that exhausted its capacity to govern global empires, leading to decolonization and in some cases the de novo creation of dozens of non-European nation-states. Democracy was consolidated in Western Europe and its offshoots while a third, mostly cold, global war, triggered still more wars and civil wars in Korea, Vietnam, El Salvador, Peru, Angola, Mozambique, and numerous other hot spots. As the cold war and its regional echoes subsided, a wave of democratization swept Africa, Latin America, and parts of Asia in the late 1980s and 1990s.

Democracy suddenly appeared to be history’s destination point…until it no longer seemed so, as new issues like Islamic extremism, south-to-north migration, and rapid exporting of jobs from high to lower-wage countries, gained prominence. A wave of ethnocentric identity politics and pseudo-democratic authoritarianism was the fad sweeping across the world as The Narrow Corridor went to press last year.

A key message of The Narrow Corridor is that human liberty and human flourishing can both be enhanced by capable and even powerful states, under the right conditions. Simply put, states that a broad enough swath of society can render accountable to them, in societies with strong constitutions and norms checking the arbitrary exercise of power (including the power of the majority over the minority), can expand the set of life possibilities faced by ordinary citizens, in part by providing an array of services such as curbs on violent crime, protection from malicious external states, enforcement of food, pharmaceutical, and workplace safety standards, provision of well-functioning roads, railroads, bridges, ports, street lights, and much else.

These things are public goods that can’t be obtained by leaving things to profit-seeking companies only. The way to get public goods paid for, on a large scale, is by putting the power to enforce the collection of taxes into the hands of a government that monopolizes some means of coercion, including the power to impose fines, to mete out prison sentences, etc. The “corridor” of the book’s title is narrow because if so powerful a government exists, what is to keep it accountable to the population that it could ideally serve, rather than becoming an overlord extracting wealth from them to benefit those holding the reins of power? The answer is that a mobilized society must grow in vigilance and in its capacity to demand accountability, as state and society progress side by side.

In a pair of papers that brought Acemoglu, Robinson, and their then-collaborator Simon Johnson to the attention of many economists in the early 2000s, the authors presented evidence that could be thought of as in line with a rather cautious view of government. They looked at a large number of countries that had once been colonized by Europeans and found high rates of economic growth since the 1500s, and high incomes at the end of the 20th century, to be consistently associated with protection of business from expropriation by government and by constraints on the power of the executive branch of government. Secure property rights and economic freedom, not effective government, appeared to be the secret sauce.

But in The Narrow Corridor, the message has broadened. The polities that come in for the most favorable treatment, in part because they’re associated with the best outcomes with respect to high productivity and incomes, high-quality education, low rates of crime, poverty, and homelessness, superior health outcomes, and low corruption and strong democratic institutions, are first and foremost in countries like Sweden, Denmark and Norway, followed by Germany, France, and the U.K. This, despite their large governments and extensive government regulations.

The message of Narrow Corridor is not the Jeffersonian one that less government is always better, but rather one more in line with those who praise the democratic welfare state and its fruits, and who point out the importance of government as a tool to enhance the welfare of most of a society’s population, as discussed in past posts here including "Trust in Governmant" and "Are Government and Market Strange Bedfellows?."

The powerful state, argue Acemoglu and Robinson, always remains a leviathan that, should it ever turn upon the people, shows itself to have a most “fearsome face.” The trick is to create a set of institutional checks backed up by an engaged citizenry, which only then can enjoy the benefits of what Acemoglu and Robinson call “the shackled leviathan.”

The book covers a remarkable range of cases, some in considerable detail: comparison of Guatemala and Costa Rica, discussion of the passage into totalitarianism via an overly aggressive socialism in Chile, corrupt and weak states in Colombia, Peru, and Argentina, paper-thin states in Nigeria and Zimbabwe, a successful democratic transition in South Africa, the prototypical totalitarian leviathan of China, and the “cage of norms” that is the caste system, abridging the rights of potential human flourishing in India. Important characters include “the absent leviathan,” “the paper leviathan,” and “The Red Queen,” a name the authors assign to the potentially benign race between a government growing in capacity and power alongside a society that likewise grows in ability to keep that government “shackled.”

(An expanded review appears here.)

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