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Development, Economics, From the Editors, Law, Security

The Gordian Knot of Illicit Economies, Violent Conflict, Human Security, and Economic Development

By ISAF Headquarters Public Affairs Office from Kabul, Afghanistan (U.S. Marines via ISAFmedia) [Public domain], via Wikimedia Commons
Posted: May 14, 2013 at 3:40 pm   /   by   /   comments (0)

On May 9th, the SAIS Review of International Affairs hosted Vanda Felbab-Brown, of the Brookings Institution, for a dynamic and engaging discussion of the illicit economy and how it relates to state-building, governance, and violence. The SAIS Review’s Managing Editor, Nic Wondra, a second-year Russian and Eurasian Studies concentrator, offers his own reflections in an in-depth editorial on Dr. Felbab-Brown’s discussion and its implications for states.

Reflections

The state is a strange creature. Today we have a Westphalian system that has evolved through the tumult of a Yalta-Potsdam referendum and two great periods of de-colonization. In spite of these turbulent eras, the modern state system is still unprecedented in human history.

Dr. Vanda Felbab-Brown’s discussion at SAIS on May 9 touched upon some fundamental questions in contemporary political science: what a state does, where states can be successful, and how threats to states can be managed. Her observations contribute to a long line of literature including Mancur Olson’s “Roving Bandit” and Douglas North’s work on the origins of institutional governance.

Dr. Felbab-Brown posed an astute question to the audience: “What is politics about, if not the allocation of violence and public goods?” This cuts to the heart of a state’s prerogatives and responsibilities. In many cases of enduring conflict, the formal or recognized state is in a precarious position, if not absent entirely. Felbab-Brown has drawn a parallel between the legitimacy cultivated by organized criminal groups through the provision of public goods, and the legitimacy squandered by formal states through haphazard coercion. In places where the labor market may be strongly dependent on an illicit sector, such as in Colombia, where the coca cultivation economy looms large, organized criminals are deeply entrenched and command a great deal of legitimacy. In this context, state efforts to combat organized groups with violence may do more harm than good for the state’s longevity.

In places where the state actively confronts organized criminal institutions, the least adept criminals are eliminated first, incentivizing a rapid and heavily vertical consolidation of organized crime. This “natural selection” of the most capable criminals may do more damage to the legitimacy of a weak state than to strengthen it. The process simultaneously costs the formal government political capital while thinning the field of informal players. Felbab-Brown advocates for a partial re-conceptualization of this problem as a “competition in state-making.”

This paradox of using violence for political ends has been around longer than political science has been a discipline. Eminent scholars such as Charles Tilley described the historical process of European state consolidation as a messy and imprecise affair. Francis Fukuyama, in his 2010 piece entitled “Transitions to Rule of Law,” explains the importance of transcendental law–the religious origins of political orders. This is only the tip of the iceberg in terms of governance inputs. The period of European nation-state formation was not only violent, but influenced by a great many factors, including merchant law, the Church, customary and traditional organization, and strong economic interests. The product of these many influences helped to generate sets of institutions and norms that are now consolidated as states. Even in the most democratic and inclusive states today, we find a history of corruption and extortion. While not preferred to a well-functioning neoliberal state, a system rife with corruption and extortion represents a state policy choice—the co-option of elites—which is often superior to promulgating violence.

The policy spectrum that ranges from co-option to coercion, as Felbab-Brown explained, requires re-thinking “the nature of the citizen-state relationship.” Governance in many places is more complicated than the maxim “if you can’t beat’em, join’em.” The nature of the social contract, along with state capacity, must be taken into account when making policy decisions that represent tough choices. Sometimes short-term priorities overwhelm longer-term governance goals. Socializing criminals into formal political structures may be on the menu of solutions.

From the perspective of the state, a short-term solution that combines co-option and coercion of criminal actors may be the optimal policy choice. Time will tell whether the Westphalian state system can remain robust when faced with quasi-state threats and incentives. If a criminal network in an inefficient state provided my physical security or a child’s vaccine, I would wonder whether my local warlord might be the best governor. A question for democratically-oriented development specialists is whether certain public goods must be provided by the state or can be provided in alternative ways.

Despite my democratic leanings, capacity to govern should be assessed as more important than whether that governance is democratic or even inclusive. As pessimistic as it sounds, political organization will not naturally converge toward democracy. Realistic expectations of state-making, instead of a fatalist belief in “The End of History,” are needed.

Nic Wondra, Managing Editor

A review of Dr. Felbab-Brown’s book, Shooting Up, will appear in the upcoming issue of The SAIS Review of International Affairs.

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