2021 has in large part been a year of books for me. Stuck in my family home in the midst of the pandemic while completing my Master’s education online, I had plenty of time on my hands. When I wasn’t working on coursework or calling friends, I read, in large part about political or economic development, including relatively new books, like Daron Acemoglu and James A. Robinson’s The Narrow Corridor (2019) or Bo Rothstein’s Controlling Corruption: The Social Contract Approach (2021), as well as others that have been out for a little longer, such as Francis Fukuyama’s The Origins of Political Order (2011) and Political Order and Political Decay (2014). Inspired to a large extent by a grad-school paper on judicial reform in Ukraine that a classmate and I wrote, I decided to write a short series of essays on these works and what lessons they hold for Ukraine’s political and economic development. These are directed first and foremost at Ukraine’s international partners, Ukrainian civil society actors, and reformers inside the Ukrainian political system. This first essay will summarise the aforementioned works, while the second and third essays will explore the challenges Ukraine faces and the conclusions we can draw regarding state-society relations and external aid and conditionality, respectively. Before anything else, I will say this: read these books. They are among the most interesting that I have ever read and turn what we would usually think of as a boring and tedious subject into something fascinating.
In The Narrow Corridor, Acemoglu and Robinson provide an account of how today’s liberal democracies achieved powerful and effective states that nonetheless respected citizens’ liberties—what they call “Shackled Leviathans” (as opposed to “Despotic” Leviathans, which are authoritarian, or “Paper” Leviathans, which are both oppressive and weak). Their main hypothesis is that liberty and state capacity depends on a balance of power between state and society. Put differently, this means that in order for the state to become stronger, society must cooperate with it, and for society to do so it must be confident in its ability to control the state and therefore trust it. It is this elusive balance which the authors call the “narrow corridor”. Such a balance requires non-zero sum competition between state and society, or elites and non-elites; that is, the two sides must be able to compromise rather than undercut each other. Moreover, societal actors must themselves be balanced in order to coordinate their actions effectively, as fear of a stronger group accumulating enough power to dominate the others might inhibit cooperation.
Acemoglu and Robinson identify three factors that determine whether a country can transition into the corridor: (1) the ability to build broad reform coalitions that support such a transition; (2) the location of the current balance of power between state and society relative to the corridor, that is, whether it is state or societal power (or both) that needs to be increased; and (3) the shape of the corridor, which affects how the other two factors play out. This might include, for instance, the share of state-run enterprises in the overall economy, which determines the extent to which citizens are dependent on the state for their livelihoods.
In The Origins of Political Order, the first book of his two-part series, Fukuyama aims to chronicle the political development of liberal democracies and to identify their key components in order to understand what is required of states today to become liberal democracies. According to Fukuyama, the three ingredients of liberal democracy are a strong state, the rule of law, and accountable government, whereby the latter two act as a check on the first. (This is quite similar to Acemoglu and Robinson’s argument—the rule of law and accountable government might even be considered as tools of society in the state-society relationship.) In this regard, corruption represents one of the greatest threats to the stability of these three pillars, and Fukuyama identifies four conditions needed for anti-corruption reform: (1) an external environment which puts fiscal pressure on the government to improve, such as military competition; (2) a chief executive who, if not leading reform, is at least not blocking it; (3) that reform champions in government have enough political support to carry out their programme; and (4) strong political pressure from below on the part of tax-payers who do not want to see their money wasted. In (3) and (4), Fukuyama echoes Acemoglu and Robinson in emphasising the importance of non-zero sum dynamics.
In the second volume of the series, Political Order and Political Decay, Fukuyama expands on the above concepts. He restates his argument – as well as that of Acemoglu and Robinson – that the rule of law and especially accountable government are rarely ever conferred from above by the state; rather, they are conquered by societal mobilisation. In this regard, Western development and anti-corruption aid programmes rely too heavily on principal-agent theory, whereby agents (state officials) become corrupted due to faulty incentives in the principal’s (the government) delegation of responsibilities. In plain English: the costs of taking part in corruption do not outweigh its benefits because of a lack of government oversight over officials or poor incentives for honest behaviour. The issue with this approach, however, is that it assumes an honest and capable state, which is almost by definition not the case in countries struggling with corruption and anaemic state capacity. Consequently, principal-agent aid strategies lead to what has been called “isomorphic mimicry”, whereby developing countries merely adopt the outward forms of Western institutions without any of their substance.
What Fukuyama, as well as Rothstein in Controlling Corruption: The Social Contract Approach, argue for instead is to understand corruption as a collective action problem, whereby most actors in a corrupt system recognise that they would benefit more from a clean political system, but do not act to bring about change due to the high costs of being the only one to do so. According to Rothstein, the best way to resolve this issue is by adopting an indirect social contract approach, which seeks to generate enough trust among the public and the elite in public institutions such that new rules of the game can be drawn and elites agree to end corrupt practices. While his argument provides a useful analytical framework, Rothstein does not resolve certain key issues, such as how to endogenously – that is, within the system rather than through external pressure – break out of what are called “poverty traps” or “vicious cycles”, which, among other things, prevent states from accumulating a minimum level of economic resources or trust to carry out reforms. For instance, Rothstein’s analysis relies heavily on Sweden’s experience of cleaning up a corrupt state bureaucracy in the 1800s, but writes that this process was contingent on the existence of a fair and clean court system, as well as sufficient resources to implement reforms. But how can a country produce such a court system if it does not have one already? What can it do if it is incapable of doing so? If a system is so corrupt that it cannot generate economic growth, how can it acquire the resources necessary for reform? Additionally, Rothstein cites universal education as a key strategy for producing generalised trust in public institutions, but also mentions that education systems are themselves prone to corruption, and empirical evidence suggests that educated individuals in a corrupt environment have lower than average generalised trust. How can one then implement effective universal education if the system is corrupt? These are key questions which Rothstein’s analysis cannot answer, though they offer fruitful areas for future research.
Returning to Fukuyama, another key argument he makes is that the good things of development do not always come together, and democratic accountability does not necessarily produce rule of law or an effective state. Specifically, historical experience shows that most liberal democracies which today have effective states constrained by the rule of law formed their state bureaucracies before they democratised, while countries that democratised before the formation of a state bureaucracy struggled (and often continue to struggle) with clientelism today, which undermines the rule of law and bureaucratic autonomy, which is crucial to the effective functioning of state institutions. Fukuyama distinguishes between patronage and clientelism, the former of which alludes to face-to-face relationships between patrons and clients, whereas the latter refers to larger-scale exchanges of favours mediated by a hierarchy of intermediaries. Because clientelism is defined by reciprocal exchanges, Fukuyama believes that it should be considered separate from – or a more benign subcategory of – corruption, which is more predatory in nature. Clientelism is more characteristic of nascent and economically underdeveloped democracies, where poverty and low levels of social mobilisation means that voters can be “bought” with, for instance, a job in the public administration. In this context, the transition from a clientelistic to a liberal democratic political order – defined by political parties and programmatic party agendas – requires economic modernisation (as wealthier voters will be harder to “bribe”) and citizens’ consciousness of their belonging to a particular social class. In the latter, ideas and intellectuals play a key role for elaborating the public good.
In the second part of this series, I will look at the challenges Ukraine faces in its reforms, state-building and state-society relations, as well as how the arguments of the above works can be applied to these issues.