Tom recommends Max

Nation-Building or Gene-Splicing?

Great piece which has Max chasing his tail a bit, but in a good, transparent way in which he lets you inside his unfolding logic--like a Chet Richards book.

I love that sort of writing, and work hard to achieve it myself when I can (of course, write books like that and people call you self-absorbed and long-winded, when neither is the case to hungry readers--though, alas, not all hunger for the same food for thought).

Just one assumption blithely offered: nation-building requires central planning. Key to doing it well is pushing just the minimal rule sets, best practices and nets to make the situation seem "exploitable" to foreign investors. Markets build nations (or more to the point, states), not the other way around. That's Martin Wolf's main point in "On Globalization," and I emphasize it plenty in the back half of BFA: good markets need/make good governments.

We need to get at market-making, not state-building. That's why Steve DeAngelis and I call it Development-in-a-Box, not Government-in-a-Box.

Again, overall a great piece of thinking by Max. Worth reading.

Comments

[BJ Schaum]

This is a great article. I do not see any real difference in what Dr Barnett and Mr Borders are saying.

The key passage:
"formal institutions are socio-economic arrangements that bring down the costs of transacting, cooperating, and exchanging. These institutions enable people to interact more freely for mutual benefit and mutual gain, are necessary for prosperity, and ensure checks on the growth of both government and interest groups. Examples are: property rights, individual rights, separation of powers, third-party dispute resolution, suffrage, the common law, contract enforcement, finance/banking, and security."

This is an elegant definition of rule sets and it ought to be the End State of DiB. Throughout his work, Dr Barnett talks about building and synchronizing rule sets as the key to state formation, economic development, and the shrinking of the Gap. In my mind, the dichotomy (expressed in earlier posts) between nation building and institution building is semantic and ultimately false.

[phil jones]

It's pretty good. But I think he shows a certain misunderstanding in this paragraph :

Whatever we think about nation building, we should all be able to agree that both positive and negative spontaneous orders can and do emerge. A key question becomes: from what do they emerge? Institutions, where institutions are, roughly speaking, the internal rule-sets by which a country operates. And there are good institutions and bad institutions.

(My emphasis.) If he truly believes in spontaneous order or "emergent" properties then he has to accept that, by definition, the macroscopic is not simply reducable to, or predictable from, the microscopic.

Emergent outcomes are the result of the rule-set up and running in a complex environment. Once you accept that, nothing is straightforward or self-evident. Sometimes bad spontaneous order will come from apparently innocuous rule-sets.

Sometimes apparently bad rules can ameliorate negative consequences and allow for healthier spontaneous orders to emerge.