Russ Roberts

Collier on Democracy and Violence

EconTalk Episode with Paul Collier
Hosted by Russ Roberts
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Paul Collier of Oxford University talks with EconTalk host Russ Roberts about the ideas in his new book, Wars, Guns, and Votes, a study of democracy and violence. Collier lays out the incentives facing a dictator who is considering the seductive appeal of holding an election. He defends his empirical work that forms the basis for many of the policy ideas in the book. Collier then makes the case for international military intervention to support democracies in poor countries.

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0:36Intro. [Recording date: June 11, 2009; continued June 15, 2009.] Spread of democracy as recent phenomenon; initially encouraging, ultimately a little disappointed. What happened? Spread is no surprise: result of fall of the Soviet Union, directly to Eastern Europe. Gave courage to democracy movements across the world. Bottom billion, rapid move to democracy. Poorest people in the world, about 60 countries that failed to grow for one reason or another; previous book and podcast. Had been autocracies, run by narrow elites running economies on own self-interest. Hopeful that the spread of democracy would lead to fundamental changes in economic policy that would bring prosperity. Core problem diagnosed as political problem of concentration of power in self-serving elites. Didn't turn out so well: why not? Missed the true nature of democracy: emphasized elections, which are the fundamental technology by which citizens hold governments to account. But elections are only part; supported by a range of institutional checks and balances, which prevent majorities from tyrannizing minorities and also prevent incumbent governments from winning elections by breaking the rules. Didn't appreciate that elections are easy to conduct, even in post-conflict Iraq, Afghanistan, Democratic Republic of the Congo. Incentive to take part in elections very strong. But the institutions that provide the checks and balances are a different story. Elections are events; checks and balances are processes. Checks and balances are public goods, no one has incentive to provide them, and in fact governments resist them. John Mueller book quote, Mexico in the 1980s, one party, a democracy 364 days a year, but the one it wasn't was election day. The rest of the year there were some checks and balances, institutional and cultural. In first few years of the new democracies, elections had some big payoffs, some old autocrats lost, but it didn't persist. Incumbent leaders woke up to the fact that there were easier ways to win an election.
6:53Thought experiment: put yourself in the shoes of a dictator or thug, list the options in a cost-benefit analysis. Option 1: Turn over a leaf and be a good government. Pro: it's what people want; and some evidence it works. Where elections are properly conducted, people are more likely to vote for the incumbent if the economy is recently been growing. Cons: If the incumbent has been running the economy badly for a long time, his skill set and the organizations are not designed to run the economy well. Would involve suppressing the patronage of elite groups, so incumbent would weaken his power base. Another con is that even with good economic performance, chances of winning are far from certain. Might be more effective ways of ensuring duration in office. In America, dramatic lesson in how difficult it is to measure how someone is doing with economic performance. Economy is doing badly now, unemployment is growing, which could either be because the stimulus package isn't being quickly enough or isn't large enough and the President needs to do more or because the President inherited a really bad situation that turns out to be worse than we thought. Impossible to distinguish. Good parallel with bottom billion in the 1990s, long period of stagnation or decline, causes of which were contested. If economists can't agree, what are the odds others can agree. Weak reed to lean on. Option 2: Lie. Pro: Lying is easier in these societies than in our own because the media is more restricted, more controlled by the authorities. Con: You've been doing it for such a long time that people don't believe you and will discount what you say. Unreliable way of winning. But you are really good at it! Some tension there. Unknowable how much in an autocratic society how much the average person believes. Pravda probably not a reliable source of information in the Soviet Union, but claim that people are more gullible. Option 3: Scapegoat a minority. Whip up a populist support for yourself by identifying the problems as due to some internal minority or some foreign country or institution like the International Monetary Fund (IMF). Disturbingly successful, long history, shouldn't underestimate the success of this strategy. Con: Very often, the incumbent rulers have depended on these minorities, especially ethnic business minorities, for their financial support. Autocrats have favored ethnic minority business people because they can't build up a political power base, can't threaten. Businessmen from the majority ethnic group who are the menace, parasites, rent-seekers. Ethnic minority businessmen are often payrolling of the patronage system of the incumbent president; don't want to weaken the ethnic minority too much, turn populist forces against it; would cut off the spigot.
15:04Option 4: Bribery. Key advantage of the incumbent over the opposition is that you've got more money, so long as you can embezzle the public purse, so you can bribe people with their own money. Like when guy promises to watch your car on a city street to prevent it from being vandalized if you give him money; what will happen if you don't? Moral hazard. Con: Might come expensive. Other con: can you trust people if you give them money and they say they will vote for you, how can you tell they actually will? Studied efficacy of bribery; find it is effective. Sometimes new technologies even favor bribery. In some parts of the world, mobile phones are used to photograph the ballot paper inside the voting booth. People in these societies regard a deal as giving some sort of moral responsibility. Honor among thieves; somebody suborns you and you feel ethically bound. Tradition of big man providing patronage to the clients, so voter bribery fits. City of Chicago: there is literal bribery, and people follow through even in a secret ballot system. Illicit strategies are not confined to the societies of the bottom billion, but are more pronounced there. Struggle for institutions which restrain the strong incentives. Option 5: Intimidation. Opposite of bribery. Can use both: bribe marginal group and intimidate clear supporters of the opposition. Can observe whether people vote even if you can't tell how people vote. Can pretty easily identify who you don't want to vote; hire thugs. Can be a winner as a strategy. Pedro Vicente, experiment during Nigerian presidential elections, expected to violent; teamed up with local non-governmental organization (NGO), randomized controlled experiment. Reduced level and fear of violence in this group of constituencies. Was a systematic effect: vote for peaceful politicians went up. Con: Two can play at that game, not clear that the incumbent has an advantage. Ultimately incumbent has advantage because he can resort to the police and army. In second round of Zimbabwean elections, that's what Mugabe did, turned to violence. In less extreme conditions, opposition might have an advantage--presumption is that opposition has widespread support or you wouldn't be worried about it.
23:31Option 6: Restrict the field to exclude the strongest candidates. Long pedigree of success. Can kill them. Book has chapter on meltdown in Cote d'Ivoire. Incumbent wanted to have a contested election but didn't want to face the two candidates who were really likely to win. Banned both of them, looked around for somebody to run against, against whom he would be likely to win. Actually lost--neglected to take into account how people would perceive his banning of the other two. Nigerian president banned everybody, but was going to have a multiparty election, so he set up five parties, each of which just happened to choose him as their candidate. Happens in real democracy, sometimes get several endorsements. Dropped dead of a heart attack before he was able to go through with this. Option 7: Miscounting the votes. LBJ solution--Robert A. Caro's biography of Lyndon B. Johnson, power and political machinations and culture. Ballot fraud is tempting because typically the incumbent controls the local authorities, who may even have been trying to please him for years. May even be competition to deliver as many votes as possible. Entrepreneurship, competitive sycophancy.
28:30Role of ethnicity in both politics and nation- and state-building. What are some of the challenges? Both micro and macro evidence that where subnational identities are very strong relative to national identity, it's harder for people to cooperate. Process reduces supply of public goods, good evidence on that. Tends to contaminate the politics, votes frozen into blocks rather than voting on the basis of performance. Example of self as Yorkshireman, voting for a non-Yorkshireman as Prime Minister unaffected. Kenyan elections. Survey results: ethnic voting very strong, 90% of Luo voted for the Luo candidate, even though their approval ratings of the Kukuyu president were quite good. Ethnic identity powerful explanation of how people voted. Possible to build national identity. Work comparing Kenya with Tanzania, different politics; Tanzanian president worked to build national identity; Kenya 40 years of leaders playing on ethnic differences. Where does that leave us--but "us" is peculiar. As students of the puzzle rather than as recommendation-makers: democracy needing institutions to develop, book stresses that that takes time. Germany after WWII. After WWI, democratic experiment died with Hitler, though he was elected. People argued that they needed more time; after WWII democracy was imposed on them and they did fine. Are they an exception to the rule? Easier in a high-income, prosperous society, in a neighborhood where other countries were democratic. Germany had a fairly long democratic history as well as bouts of autocracy. Germany was not left on itself; American troops stationed there, rapidly stitched into European community and semi-global institutions like the Organization for Economic Cooperation and Development (OECD)--democracy clubs. Germany had an easier time, lots of support. Japan as well, little democratic history, took root. Context of prosperity and a lot of international support. Tools for prosperity. What's holding the countries of the bottom billion back? Meta-public goods: accountability, internal security.
38:37Methodological question: history, facts, incentives, reality. Traditional economics, regressions, variables measured imperfectly. Common in last 20 years. One problem with statistical approach: one never has the data on all the other characteristics to control for them. Another problem: causation, may be impossible to know. Why do you believe that statistical work is more reliable than a more intuitive approach based on facts and observation? Not necessarily more reliable. Looking for confluence of those two approaches. Three big propositions on the proneness to conflict: level of income mattered, growth of income mattered, and structure of income mattered--dependence on natural resource revenues. All three have been explored more thoroughly; evidence still supports them. On level and risks from natural-resource dependence, new and sophisticated paper by Besley and Persson, very stringent test of those propositions, finding statistically significant results. Can they be nailed statistically? No. Policy can't wait for hundreds of years while economics sorts these things out. Over 100,000 UN peacekeepers deployed around the world. Should there be more or less? Statistical analysis of peacekeeping; not definitive study. Field open for more work. Practitioner academics and political scientists saying the same thing. On peacekeeping, Copenhagen Consensus, pitched it as a sensible policy. Good value for money. Mixture of statistical and policy evidence. Danger is that at times statistical evidence give a patina of reliability that is undeserved. Research center on the economies of Africa. Statistics without knowledge of context can be dangerous. Tried to accumulate ground-proofing.
46:45Recommendations, last third of book, controversial, based on statistics and intuition both. Advocate of more external intervention into the political process of less developed countries. First case, process of internal accountability is often not working very well. Iranian elections, reason to think that citizens' preferences have been ignored. Internal struggles within these societies often going wrong. Can the international community do anything about it? Should it--prior ethical question? Is it colonialist? Fatuous accusation, not made by Africans: ludicrous conflation. We know what colonialism was: foreign empires which themselves which were not democratic invading territories and running them with imperial power. Different from temporary intervention under the auspices of the United Nations. Ethically don't see that there's an issue. Often has been international assistance. Question is not ethical, but whether it's feasible. Feasibility: more basis for skepticism, often really isn't feasible. If sometimes it isn't feasible, should we try in conditions where it is feasible? Like saying because we can't save the lives of all children we shouldn't save the lives of any. Are there contexts where it can help? Sometimes yes. Not advocating Iraq II, troops flying in and putting down an established government. Range; follow the money, our aid money. By providing aid without sufficient budgetary transparency we are often inadvertently empowering the crooks. Proposal: independent international verification--giving money to governments is okay in the sense that budget system can prevent its being stolen by political crooks. Not a matter of being accountable to ourselves, but a matter of only providing money in contexts when governments are reporting to their own citizens. More controversial areas are in terms of security. Most controversial: idea that we should protect democratically-elected governments against threats from their own armies. Not inconsequential: in last year in Africa four coups, two of them against democratically elected governments. In all four cases, African Union condemned the coup, but that's not enough for the coup leaders to go back to barracks. Timely military intervention by Africa would have discouraged these things; just the threat of intervention enough.
56:00Ethical issue: not in it for plunder, exploitation, altruist, good intentions. Question is whether it enables others, bootlegger and Baptist argument: regulation passes with support of those who have high minded reasons. Worry is that justification will allow others to pursue less attractive agendas. International community is not an entity, a conscious entity, faces no incentives that individuals face; emergent phenomenon; even U.N. is not under anyone's control. In the face of the public choice issues, why would these actions be done for the reasons you care about as opposed to the reasons less-attractive people would care about? Even within the U.N. security council, three big democracies that have the power of veto--America, Britain, France. In each, we can to a reasonable extent count on the process to discipline government. It would have to break down simultaneously. Not trying for perfection; trying to improve. Re-establish empire?--think not. Empower poorest places in the world, yes. Can envision situations where that power would be abused, but how likely relative to current abuses in less democratic countries? Less sanguine about democratic process even in developed countries. History of U.S. aid not particularly attractive. Could argue it was not done well; Bruce Bueno de Mesquita has argued it's been done all too well. West generally. In Bottom Billion: In a democracy, you can't get better policies than ordinary citizens understand. At the moment, ordinary citizens' understanding pretty poor. Kiss the baby. Is it possible to build a more informed citizenry? Yes. Appetite to get up speed. Issues are not that difficult. Far less complicated than getting people up to speed on financial regulation or inflation/unemployment.

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COMMENTS (8 to date)
Justin P writes:

I liked this a lot. I saw more than just one parallel between the different choices and what we have here in the US. I'm going to have to read the book, but it sounds like the US is really no different from Zimbabwe in many respects. I can see options 2-7 in the last Pres election alone. I should say, the politicians are no different. It make the case for smaller government all the more appealing.

I do share Russ' Statistical Skepticism, the Hayekian scientism. Everyone that has taken a sophomore level Stats class should be able to tell you how easy it is to make the number come out to however you want them to be, conformational bias.

This overwhelming religiosity of science is something to be feared. Hayek knew it. How arrogant is man to think they can mathematically model something with so many inherent variables?

I have to completely disagree with Collier on interventions. As Russ alluded to, most of the "aid" doesn't go where it was intended to. To add another level of "independent international oversight" won't solve the problem, it will only make the cronyism worse. More hands means more hands grabbing what they can. People, especially in the International community are greedy, and I don't mean the good greed of Walter Williams and Adam Smith, but avarice. Not to mention the huge amount of disincentives that Aid provides those governments getting aid.

Thanks again Russ, always look forward to the next Econtalk podcast.

Eva writes:

Am only half way through, very interesting so far.

We've just had a European election and the British National Party gained two seats. Like many British parties running for EU parliament, their programme included the scapegoating of a minority (immigrants) and at the same time pointing at a supranational institution (EU) as the source of national problems.

I found this part of the podcast very relevant, not just for the Bottom Billion, and it made me think about these mechanisms of election manipulation from a different angle, the usual framework being more of a Public Choice approach.

Schepp writes:

The assumption that democracy is about voting is a huge issue. I believe that the only reason that democracy has thrived in western societies is that the individuals truly have enough power to keep the system working more for them than against them. Economic output is the key element that engenders the needed power. Democracy has worked to the extent that it has because of the incentives that are in place in the market place of everything.

This system was not engineered institutions but individual people seeing and supporting institutions that help them and working to disband those that harm them.

I challange Dr. Roberts, Dr. Collier and others to ask themselves the following question: Dr. Munger believes that we should understand market prices and not fight price gouging. How is the governing structure and payment for governance of inefficient countries different than establishing the market price?

The brutal answer may be that the only way to establish governance structures that helps the bottom billion is if there is an economic reward for those that establish the need institutions. The payment must be derived from the increased output from the bottom billion; not as extortion but as a market price for the improved condition. I believe that the economic rewards can be there and it is possible to enable many to rise up. Not because it is fair, but because it can be good business.

The reality is that evolution produced humans which I like and seem good and social beings and animals such as crocidiles that I dislike and seem feirce and ruthless. It is likely that our future paths can go in either direction or more likely both.

Dominic Shore writes:
The payment must be derived from the increased output from the bottom billion; not as extortion but as a market price for the improved condition.
Your answer seems to presuppose that institutions will exist at some point in the future to facilitate the transfer of that payment. Even if those institutions did exist today how risky would those assets be? Would anyone hold them in their portfolio?

An asset which paid a series of dividends derived from the increased productivity resulting from the establishment of a governance structure. It seems to me that such an asset would be discounted very heavily given the probability of future political turmoil.

To add another level of "independent international oversight" won't solve the problem, it will only make the cronyism worse.
Couldn't agree more with you Justin P. Indeed, it raises the question of whether governments should be involved in providing aid at all
General altruism, however, is a meaningless conception. Nobody can effectively care for other people as such; the responsibilities we can assume must always be particular, can concern only those about whom we know concrete facts and to whom either choice or special conditions have attached us. It is one of the fundamental rights and duties of a free man to decide what and whose needs appear to him most important.
Section 5, Chapter 5 – The Constitution of Liberty
Schepp writes:

Dominic,

I do not presuppose that institutions will exist. I simply think that the creation of beneficial institutions will far more likely come from a profit motive rather than altruism. I agree with your points regarding the high risk based on current business models that I know of today. I appreciate your skeptism and acknowledge the difficulty of meaningful change in this area.

But even with all the difficulty, I still stand by the thesis that there is opportunity to improve the current conditions with market solutions.

AHBritton writes:

I must say that much of the introductory portion of this podcast does seem to be as uncontroversial as almost anything can get. A couple of comments about the religiosity of science. In a way it seems like Hayekian's exploit a certain fear of commitment in this respect. For instance you could use the example of meteorology. This field is based upon a complex and chaotic set of interdependent variables. Sometimes it is right, sometimes its wrong a lot of times it is close. The main aspect in which it differs from socio/political science is that the weathermen are not studying themselves, and the only incentive they have is to predict the weather correctly. Continuing with the metaphor, political "weathermen (or women)" have the incentive to predict the weather they want to happen and explain away any contradictions with esoteric machinations. This IS a pretty big difference.

I am not a political science, economics, physical science, etc. major. I majored in music. With my limited preparation I do think there seems to be the problem of throwing out the baby with the bath water. I've never read any Paul Collier but it seems as if people are saying that no matter how ingenious, how accurate, or how well designed; any study of social behavior on a macro scale is more than inconclusive it is meaningless. Now I agree, and possibly have even briefly argued here before in the case of the Walmart podcast, that certain surveys, especially very anecdotal ones, are easily arguable. Even in the case of an individuals experience, however, I do feel that there are more valid examples and less valid examples, however subjective that judgement may be.

Another example would be the case of polling. Polling can be misleading and can lead to drastically different results depending on how the question is asked and the mood of the poll taker. That being said I am pretty sure everyone here would be somewhat skeptical in the least if it had been revealed that Dennis Kucinich or Ron Paul had been revealed as the "surprise" winner of he presidential election. Does this make polling a science the same as physics? No. Does it make it irrelevant? Also no. I understand being skeptical but to immediately claim its bias or invalidity is, in my opinion, laughable.

In closing I would like to point out two examples that were made, one by Roberts and the other by Collier, that seemed to contradict their own viewpoints in a way. Roberts points to the examples of Germany and France in that they did not previously have strong democratic institutions prior to WW2. Seemingly (?) arguing (devil's advocate?) that the intervention in the post war period were able to (mysteriously?) create strong democracies. The second was by Collier who seemed to at the end advocate policies which the "average" person could understand making many of his "complex" studies seem less important... unless that is he wants said studies to be accepted without equally complex review by the public.

Larry writes:

One of several statements that really stands out for me is:

Economy is doing badly now, ..., which could either be because the stimulus package isn't being quickly enough or isn't large enough and the President needs to do more or because the President inherited a really bad situation that turns out to be worse than we thought.

I wonder whether these are really the only two alternatives. Surely, at least one other is that there has been far too much federal intervention and yet more is not the solution, but will only make the problem worse.

Briefly, a few random thoughts.

The discussion of President Abacha of Nigeria, strongly reminded me of the 2009 Pittsburgh mayoral election. For those that don't know, Pittsburgh has not elected a Republican mayor since 1933. The incumbent Luke Ravenstahl won the Democratic primary nomination, and also(through write-ins and the fact that no local GOP members sought the nomination aggressively) the Republican ticket. Russ, perhaps you could do a future podcast on political incentives in America that lead to one party's regional/local dominance?

I'd agree with commenter Larry that the above statement(I can't remember if it was from Russ or the guest) sounded like a false dichotomy. Another alternative would be that the particular expenses authorized by the stimulus package are not likely to encourage economic growth.

Definitely reading Caro's LBJ bio soon. Possibly his of Robert Moses as well - I'd really like to see the specific ways both of them achieved their goals.

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