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Reverse engineering out of rubble: ‘Why States Recover’, by Greg Mills

Amid all the pessimism about state collapse in so many places, scholar (and Daily Maverick's regular contributor) Greg Mills has offered a volume that both catalogues these disasters around the globe as well as argues that healing is possible. J. BROOKS SPECTOR takes a look.

Years ago, this writer worked as a diplomat at an embassy in a small country that had a traditional authoritarian form of government. Nevertheless, this nation’s head of state boasted what could only be described as a fairly tenuous grasp of economics. As a result, it was determined that one of our contributions to his on-the-job education would be to provide him with the right kind of computer software.

Once we made certain he had easy, direct access to an up-to-date, powerful desktop computer (for the mid 1980s), we arranged to install an early version of the popular computer game, Sim City, on that computer. The idea behind this, of course, was that a better understanding of the role of taxation and service delivery in economic growth (i.e., tax everyone too much and they leave the city or hide their assets; tax too little and the country can’t pay for basic services) would be more easily comprehensible via Sim City than it would have been from some dreary read of an economics textbook. Well, maybe playing Sim City helped him. But, then again, maybe this newfound knowledge didn’t, since the range (and expense) of this leader’s fleet of luxury cars visibly began to grow right about then.

Meanwhile, the country was a peaceful place, even if it was not a particularly well-off nation, although it had lots of potential for a gradual growth and development into a modest level of real national prosperity. Still, since it was peaceful and it then had a relatively low level of systemic corruption, foreign aid agencies were attracted to it like moths to a porch light in the evening. They flocked in to help – especially in contrast to the country’s two big neighbours, with the one embroiled in a seemingly unstoppable, largely ethnic-based conflict, and the other brutalised and devastated by a long-standing civil war.

Besides the various arms of the United Nations and a significant number of foreign NGOs, some eighteen different nations were active with one type or another foreign assistance program in that country. This help ranged from educational curriculum development, advisory and training missions in the national finance ministry support for the various small business development agencies of the government, as well as a whole clutch of development volunteer agencies, along the lines of the Peace Corps.

And this development crowd did not even count all the non-resident foreign foundations that were giving grants for various activities to local non-governmental bodies in that nation. Indeed, this writer once jokingly remarked to colleagues that it seemed as if virtually every one of the large, extended families in the country could have had their very own personal aid worker, so thick on the ground was such help in those halcyon days.

The cruel irony for that pleasant place, inevitably, is that this nation is now worse off, or at least no better, than it was some three decades ago. Once its neighbours had settled their tumultuous ethnic squabbles and civil wars, many of those assistance programs were greatly scaled back. Meanwhile, the repercussions of AIDS had cut its cruel way through the society and the end result is that per capita income is now no higher than it was before, and some social pathologies and a growing sense of civil disorder has actually increased.

Into this vexed question of how to build (or rebuild) wounded societies politically and economically, Greg Mills has stepped in with a new volume, Why States Recover. With over 600 pages of text and reams of footnotes beyond that, Mills has grappled with a question that has tempted and tormented political and economic philosophers for a long, long time. In truth, Mills has actually tackled two different questions and then attempted to weave them together for a more comprehensive and systemic response.

One the one hand, Mills has taken on the topic first set out by Plato in his work, The Republic, over two thousand years ago. That is: what kind of political system is both fair and efficient in dispensing justice? (Plato’s conception of justice went far beyond the current notion of courts and laws, of course.) Ultimately, Plato decided that the philosopher king, guided by a council of wise greybeards, was the best answer, or at the very least, the least detrimental answer for a society, and that such an approach was the one most likely to provide stability in government for a potentially chaotic, anarchic world.

Later political philosophers have, of course, come up with markedly different answers, but virtually all of them have recognised the need to identify all of the interests at work and how to balance them so that society is not turned into a kind of unyielding cement, even as the rights of individuals are protected within a larger social framework. In recent years, scholars such as Samuel Huntington in his own doorstop of a book, Political Order in Changing Societies, offered a rather dyspeptic view of political progress. Huntington argued, in effect, that the best changes for progress came from a skilled, adept, efficient near-authoritarian regime that would not make the kinds of mistakes Alexis de Tocqueville had warned about with his judgment that the most dangerous moment for a “bad” regime was when it finally attempted to reform – after being pushed into it.

Running parallel to this political discourse, economic theorists have wrestled with the question of how to nurture self-sustaining growth with the right mix of private and public expenditures. This really began in Adam Smith’s Wealth of Nations and Alexander Hamilton’s Report of Manufactures, as well as in the works of thinkers like David Ricardo and Thomas Malthus. In more recent times, Walt Rostow’s The Stages of Growth, David Landes’ The Wealth and Poverty of Nations and The Unbound Prometheus, as well as Paul Collier’s volumes such as Wars, Guns and Votes have all contributed to this discussion, among many others. Along the way, among many other thinkers, Karl Marx offered his insights about that implacable economic machinery that operated below the surface, as well as his conception of a fundamental struggle between capital and labour. Meanwhile, Max Weber kicked off a debate about the religious and social basis that gave birth to modern capitalism with The Protestant Ethic and the Rise of Capitalism.

In Why States Recover, Mills has largely tried to keep theoretical discussions about development and politics deep in the background in trying to weave together these two strands – the political and economic. Rather, he has drawn upon nearly thirty case studies – from Afghanistan to Zimbabwe – from around the world. These include states that started well, but then faltered badly like Argentina, as well as places like the Congo where virtually nothing has gone well since its independence in 1960. Along the way, Mills also looks closely at nations like Vietnam that suffered immense hardship from decades of warfare, but that have now, presumably, made a sustained leap into the ranks of the newly emerging economies as they have become integral parts of the global supply chain of the production of coveted consumer goods. And, of course, Mills also take a look at Singapore for clues about how a nation finds the strength to muscle its way into the leading part of the pack.

Along the path of his journey through all these faltering nations, Mills takes a few shots at those development professionals and political figures who have taken to criticising the World Bank and the IMF for the supposedly wicked ways of the Washington Consensus. This set of policies generally includes support for austerity in government spending on social welfare and any growth of government employment and related spending to prevent profligacy and waste. In addition, it calls for the provision of grants and loans only when strong conditions have been imposed on the recipients of such loans so as to limit corruption and fraud, and it also includes a strong opposition to commodity subsidies because of their market-distorting impact. By contrast, Mills is a strong proponent of government stability and competence – the presumed goals of that Washington Consensus – as a key requisite for national resurrection and development in all these flailing nations.

Besides being a well-schooled scholar, Mills is an exceptionally well-travelled one as well. In recent years he has spent considerable time in the countries he has profiled in this new book, including a significant chunk of time spent as a political advisor to British forces in Afghanistan – and Afghanistan forms an important foci for his analysis.

These individual national disaster profiles can occasionally slip out of the analytical texture usually expected of a development scholar in an academic study. Instead, some of them take on the character of a world-weary travelogue owing a bit of a debt to writers as varied as PJ O’Rourke, Ryszard Kapu?ci?ski, Joseph Conrad, VS Naipaul, Paul Theroux and Somerset Maugham – with just a soupçon of Evelyn Waugh’s wry voice as well.

As the reader follows Mills’ movements around the globe looking at the kinds of places PJ O’Rourke once called “Holidays in Hell”, it becomes clear Mills is firmly of the view that order, predictability and efficiency in both the political and economic spheres are key variables for economic growth and national recovery, just as long as physical security can be expanded successfully in conflict zones. What these mean is that consistent, predictable government management of the regulation of imports and exports, taxes, and legal administration matter more than fairness – at least at the beginning of the rebuilding process. Fairness eventually comes as economic growth is given a more hospitable home when people can do more than just guess about how things will work out for them whenever they have unpredictable dealings with government.

Rivalling fairness, however, Mills values competence in government as crucial, with the history of a place like Singapore as exhibit A for such success. (Singapore, of course, scores rather lower in political liberties.) Once Mills’ agenda is has become clear, it seems that he is really a 21st century version of an old, unreconstructed Benthamite – the goal of a government is to provide the greatest good for the greatest number, rather than to necessarily be fertile ground for freedom and personal liberty. In that sense, Mills is, whether he acknowledges it or not, also reaching back to Plato’s old worldview. For Mills, what is needed is a regiment of wise, uber-competent philosopher kings like Lee Kwan Yew who can be installed to set things right in all those failed or fragile states. This would be the kind of leadership that can withstand the demands (and temptations) for building corruption and patronage networks, and that will not acquiesce in populist demands for administratively delivered – but thoroughly market distorting – subsidies for basic goods and services.

In all of this, what seems somewhat surprising is that a number of societies that have clearly gotten a considerable share of this process right – usually after their own versions of severe political and economic disaster – are barely acknowledged in Mills’ writing. Their respective economic and political evolutions are scarcely called upon to help clarify the things facing the current crop of states Mills has written about.

For example, Japan’s history in the Meiji era after the three centuries of that country’s isolation ended in the middle of the nineteenth century, was a period of extraordinary economic advancement (and at some significant costs, for many), as well as an extended period of experimentation with political restructuring, drawing on the advanced models of the day. But there was no foreign aid for the Japanese, then. Rather, the government recruited and paid for every foreign advisor who participated in the rebuilding of the Japanese economy and its political world. This included railroad experts and agricultural specialists from the US (such as the country’s secretary of agriculture), industrial experts from France and the UK, and educational advisors from Prussia.

In the post-World War II period when Japan had to be reconstructed yet again, although many decisions were made by a philosopher king in the person of General Douglas MacArthur as the occupation’s proconsul, as they gained fuller powers, the country’s economic policy makers deliberately restricted consumption, enforced savings to accumulate capital for banks to lend to exporting industries, and carefully doled out scarce foreign exchange to support industries specifically generating export earnings. Industrial policy called for industries to racket up the value chain as markets were conquered and product reputations earned. (Yes, Japan gained significant US aid in the immediate post-war period, but a much larger impetus was spending related to procurement to support UN forces in the Korean War.)

While Japanese democratic practice has its flaws, no one doubts it has delivered a well-supported political structure in tandem with an economy that offers a middle class life for most of the nation. And all of this is in spite of the virtual absence of any major natural resources inside the country to support industry.

Similarly, the economic (and increasingly political) miracles of South Korea and Taiwan could have also been offered as examples of other societies that largely follow the Japanese example so as to help clarify what the common threads to these growth trajectories have been for these nations. For that matter, it might also have been useful to look at models like Turkey and Israel for insights on how modern polities created the kind of social cohesion within their societies (even if not fully inclusive ones, obviously) that have helped transform their respective economies – turning them into economic powerhouses. Naturally, too, the case of German unification and the economic integration that followed would have also been particularly illuminating.

And, of course, Mills’ study would have also profited from some acute observations (and comparative analysis) about how China fared in the period after the repression that came after the Tiananmen Square events. From that time onward, China’s leadership has managed to keep political authoritarianism firmly in place, even as it has had to deal with the growing corruption that came with the great wash of cash hitting the country, once the concomitant economic liberalisation turned the country into the world’s factory and a massive economic engine. Of course all of these observations might have made Mills’ Why States Recover a massive multivolume shelf of books, rather than the still substantial book it already it became.

Despite the lack of such proposed chapters, and even if Mills has eschewed efforts to link, consciously, his thinking with the larger sweep of writing historically on political and economic progress, Mills’ book is deeply informative, entertaining, and thought-provoking. There is much evidence cited by Mills that should be contemplated by readers and he offers many observations worth arguing about. Moreover, in spite of all the evidence of disaster he has piled up in these pages, there remains Mills’ optimism the resurrection of even the most disastrously degraded polities can be salvaged, if enough energy and effort comes from within the societies themselves – but only if their elites and citizens want to achieve such outcomes strongly enough. DM

Greg Mills, Why States Recover – Changing Walking Societies into Winning Nations from Afghanistan to Zimbabwe, Published by Picador Africa, 2014, ISBN 978-1-77010-325-2


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