Lecture-7-Failed-State-and-Underdevelopment-Government-and-Market黄琪轩-国际与公共事务学院.pptx

f the State2.The Growth of Government and Government Failure3,Beyond the Washington Consensus?4,What is Failed State?5,Causes of Civil Conflict 1.Normative theories of the StateThe theory of Market failure;government intervention is needed when markets are not“Pareto Optimal”.Non-competitive marketsPublic goodsExternalitiesIncomplete MarketsSo far so good;some economists add the following:Merit GoodsMacro-Economic equilibria(central Banks)Certain economic goals,like eliminating poverty and inequality,or promoting economic growth2.The growth of government and Government FailureAfter WWII,growth of state was rapid:broader set of activities/objectives than western governments had in earlier era(in particular transfers and social policy).public role in production(to grasp the commanding heights),with growth of parastatalssize and growth of state was limited by fiscal means;even so,one consequence of the growth of government in 1950s and 1960s,was fiscal crisis in 1980s.2.The growth of government and Government Failure ContdKruegers arguments:Governments try to do too much;Unintended consequences of government action;Government policy actually regressive(failure of targeting)Why?Officials are not disinterestedPolicy creates rents,rent seeking3,Beyond the Washington Consensus?(Enormous gulf between policy and academic world);in the former,WC not a term of insult.Backlash since early 1990s:Substantial social cost of crisis particularly in latin America;“Heartless”Market fundamentalism lost the public relations battles.3,Beyond the Washington Consensus?ContdBy the mid 1990s(under Wolfensohn)the WB started a big focus on social sectors and anti-poverty work,mostly through public action.Washington institutions overreached,notably on privatization and capital market liberalizationso that members of the consensus like joe Stiglitz became openly critical.3,Beyond the Washington Consensus?ContdThe“problem”of the Low income countries is not really too much state,it is“not enough state”;Poorest states are unable to perform basic tasks;Government Employment,early 1990s(as%of Population)General GovernmentCentralLocalEducation and HealthAfrica(20)2.00.90.30.8Asia(11)2.60.90.71.0E.Europe&ex-USSR(17)6.91.00.85.1Latin America&Caribbean(9)3.01.20.71.1Middle east and N.Africa(8)3.91.40.91.6OECD(21)7.71.82.53.4Global Average4.71.21.12.4Stylized facts about these low income states:Low income states are very smallThey tend to be very centralizedClose to half of state personnel are teachers and nursesin addition,these states have very low capacity to do much of anything.They are not“bureaucratic”,at least in the Weberian sense of being professional,goal driven and acting for the public good(Goldsmith)4,What is failed state?ContdThree different,overlapping conceptsVery weak states(eg CAR)Collapsed statesFailed states and civil conflict4,What is failed state?ContdA,Very weak states1.Not necessarily any conflict.2.Weak state,that may not project power much outside of main cities-No state tradition before colonialism-No major sources of state revenue-Protection from International community allows it to survive-also not by coincidence small populations often on big territory-often land locked,often has very poor neighbors.3.No clear ability to enforce law and order,particularly outside of main cities.May not have a“monopoly on force”4.state provides very few public goods(health,education,infrastructure).4,What is failed state?ContdExample:In a village of Africa1.In the absence of the state,three sets of political actors seem to dominate at village level,and provide public goods,such as they are:village chiefsChurches:Farmer organizations Producer associations Project groups(organized by donors in context of project)“base”organizations,often motivated by possibility of external funding2.Scope,and nature of authority and legitimacy not clear.Overlapping responsibilitiesLinks to state often informal,ambiguous and or non-democraticLaws,decrees often not carried outState only intervenes in cases of conflict,if thatNo state budget,local revenuesLack of transparency of most of these organizations4,What is failed state?ContdCIVIL WARS/INTERNAL CONFLICTVery costly:Between 1960 and 2000,internal war casualties totaled more than 10 million deaths.Collier estimates that the average civil war cuts into annual growth rates by 2.3%Likely to sponsor“public bads”:disease,terrorism,drugs etc,that radiate out from conflict country to the rest of the world.Civil wars invariably internationalize(through migrations,regional politics)to neighboring countries,and thus have very negative regional effects not least on perceptions;Vicious cycle:the wars continuation is made more likely by these costs.5,Causes of civil conflict Case study work vs quantitative cross-national researchA.Structural explanationsArtificial borders and ethnic heterogeneityStructural inequalitiesLow income(yes,but why?)Low density,rural countriesHigh levels of unemploymentDominance of stateEndogenous changes of structural factorsReliance on primary commodities5,Causes of civil conflict ContdB.Proximate causesThe end of the Cold WarStructural adjustmentDomestic institutional changeseg establishment of Sharia in SudanSlow or negative economic growth rates(Collier)5,Causes of civil conflict ContdCollier argues that certain actors benefit from a war economy.Soldiers may want war to gain access to lootable resources.key commodity such as diamonds or gold help finance conflict,thus sustaining it.War may also help cover other illicit activities that are quite profitable(smuggling,drugs):Relief assistance is valuable resource for state and warlords.