WHY NATIONS FAIL and others don t
Theory Statistics Examples
Nonphysical juridical entity that is represented by one centralized government that has sovereignty over a geographic area permanent population defined territory one government and the capacity to enter into relations with other sovereign states
Failed states can no longer perform basic functions such as education, security, or governance, usually due to fractious violence or extreme poverty. according to Fund for Peace: Loss of control of its territory, or of the monopoly on the legitimate use of physical force therein Erosion of legitimate authority Inability to provide public services Inability to interact with other states of the international community
WHY NATIONS DON T FAIL Geography Climate, Landscape, Trade Routes... (US Border towns, Koreas, East/W Germany) Culture Africans are lazy. Ignorance Inequality exists because rulers don t know. Prosperity depends on solving political problems.
How can we measure a nation? Economy Inequality Development GDP/GNP (per capita), PPP Gini index HDI, IHDI, Human/Multidimensional Poverty Index Social Progress Index Satisfaction with Life Index Fragile States Index (Also Rogue state, Axis of Evil, State Sponsors of Terrorism, Pariah state)
The Vicious Circle Extractive political institutions allow the creation of Monopoly of power, no checks and balances Extractive economic institutions Excludes many Empowers few
Extractive vs Inclusive Institutions But... Economic growth in authoritarian states Democracy Prosperity Maybe the other way around? (More $ -> More Democracy) Too much Government vs Not enough? There are four kinds of countries in the world: developed countries, undeveloped countries, Japan and Argentina. - Simon Kuznets, Nobel Prize 1971
Anna Karenina principle All happy families resemble one another, each unhappy family is unhappy in its own way. Leo Tolstoy North Korea Somalia Egypt Colombia Peru Austria, Russia Lack of property rights No law and order Big men get greedy A weak central government Bad public services Elites blocked new technologies No, no, I will have nothing to do with it, lest the revolution might come into the country. Franz Joseph I of Austria on trains
Kleptocracy
Why did the industrial revolution start in England? 1215 1688 1800s Magna Carta Glorious Revolution Industrial Revolutions 1832-1918 Reform Acts, Democracy Whereas absolutism stayed the normal form of power execution through most parts of Europe, institutions ensured property rights and political safety to the people in the UK after the Glorious Revolution of 1688. Creative Destruction
The middle east
Gulf Cooperation Council Regulations Trade Peninsula Shield Force Common Currency Future Gulf Union?
UAE History since forever Spices, Date trade until 1930 Fishing villages, Pearls 1950s Oil is discovered 1960s Commercial Oil exports begin 1971 UAE forms under Zayed bin Sultan Al Nahyan (UK cannot afford to administer and protect sheikhdoms) 2000s Construction boom
What does UAE export? (2015)
What does UAE export?
Exports UAE (2015)
Exports Germany (2015) http://atlas.media.mit.edu/en/visualize/network/hs92/export/deu/all/show/2015/
https://youtu.be/vl38s4430dk?t=8s
Qatar We have more rights than we deserve. subsidies, state jobs, land grants, and free university education, 60% salary increase in 2011 Bahrain Violent in 2011 Protests since
The Opinion and the Other Opinion
1. 2. 3. 4. Rothschild, Germany House of Saud, Saudi Arabia Walton, USA Koch, USA Wealthiest Families $350 billion - $2 trillion $1.4 trillion $152 billion $89 billion (Bill Gates $87 billion)