order & violence (political economy of development)€¦ · · 2018-01-16order & violence...
TRANSCRIPT
Manysmartpeoplearegenuinelypuzzledbythesecases
• Whydocountrieswithsomuchpotentialseemtostaypoor,unequal,andviolent?
• Whyhavetheirleadersnotimplementingbetterpolicies?
• Actually,whydosomanyleadersseemtodotheopposite?
• Whydosomanyinterventions—aid,trade,peacekeeping,regimechange,democratization—lookgoodonpaperbutgoawry?
• What(ifanything)candomesticreformersorpeoplefromothercountriesdoaboutit?
• Whatcanyoudoaboutit?
Theideabehindthiscourse
Thesesituationsarelesspuzzlingonceweunderstand:
• Howgroupscompeteforpowerinasociety
• Whenandwhythiscompetitionturnsviolent
• Howstatesprovideorder
• Whyorderissooften“corrupt”
• Whentheseordersbecomemorefreeandequal
• Howinterventionsandreformsinteractwiththeseconditions
“Theanti-politicsmachine”
• Solvingpovertyandimplementingprogramsisastechnicalproblem,notasocialandpoliticalproblem
• Developmentprojectsareapoliticalmachinesthatexisttoprovidesocialservices
• Cliques,factions,inefficiencies,andcorruptionareseenasimpedimentsratherthanstrategicreactionstotheenvironment
• Partisanandinterestedaidinterventionsaredisguisedasimpartialanddisinterested
Thiscourseisaboutpoliticsandpoliticaldevelopment
Thegoalistoavoidanyofyoubecominganti-politicsmachines
Economicdevelopmentis(relatively)easytoquantifyTotalincomeproducedperkm2,1995
Mellinger,A.D.,J.Sachs,andJ.L.Gallup.1999.“Climate,WaterNavigability,andEconomicDevelopment.”CIDWorkingPaperNo.24.
WhatmostdevelopmentcoursestrytoexplainIncomepercapita(PPP,1990US$,logscale)
Perkins,D.H.,S.Radelet,andD.L.Lindauer.2006.EconomicsofDevelopment.6thed.NewYork:W.W.Norton&Company.
Endsversusmeans:ProductionandGDParenotanendinthemselves
Thelifeofmoney-makingisoneundertakenundercompulsion,andwealthisevidentlynotthegoodweareseeking;foritismerelyusefulandforthesakeofsomethingelse.
– Aristotle,Nicomachean Ethics
“
AmartyaSen’s“capabilitiesapproach”
• Thecentralaspectofwell-beingisfunctioning:thefreedomofchoiceandcontroloverone’slife– Freedomfromhunger,fromdisease,fromearlydeath,fromviolence,fromoppression…
Politicaldevelopmentasfreedomfromviolence,oppression,injustice,uncertainty
Defineasoutcomes…• Order
– Protectionfromviolence– Accesstojustice
• Equality– Massparticipation– Preferencesaggregatedand
represented– Ruleoflaw
• Abilitytoshapesociety
• Complex,adaptable,coherent,sharedrules
…orintermsofstructures• States
– Monopolyoflegitimateviolence
• Bureaucraticorganizationsandpublicadministration– e.g.formallegalsystem
• Constraining“institutions”– Constitutions– Democracy– Informalnormsandtraditions
Source:Ibasicallymadethisup.ButhelpfulwasPye,L.W.1965.“TheConceptofPoliticalDevelopment.”AnnalsoftheAmericanAcademyofPoliticalandSocialScience358:1–13.
Mostoftheeconomicsyouhavelearnedhasassumedthatorderexists
• Propertyrightsandcontractenforcementexist
• Actorscantradeandexchangepeacefully
• Statesarecoherentunitaryactorswhocanimplementpolicies
• Statesareconstrainedbyformalandinformalrules– E.g.Constitutions,socialnorms
• Marketsmaybeimperfect,perhapsbecausedifferentactorshavedifferentinformation,butmarketsmainlyfunction
Howdidthesethingscomeabout?
Whathappenswhentheydon’texist?
Weeks1–5:Understandinghowtheseoutcomesandstructuresevolvedhistorically
Weeks6–10:Understandingwhatreformsandinterventionscandotoday
1. Howandwhyorderemergesoutofanarchy
2. Whyisthereviolenceandwar?
3. Theoriginsandnatureofstates
4. Whendostatesbecomemoreequalandparticipatory?
5. Howdoescivilsocietyfosterandprotectfreedoms?
6. Addingitallup:Understandingtoday’sweakstates
7. Canarmedinterventionscreateorder?
8. Howtopeacefullypromoteorderandgoodgovernment?
9. Whataboutfosteringdemocracy?
10. Hownottobeananti-politicsmachine
Requiredreadings
• Roughly4chaptersorpapersaweek
• Yes,really,these4reallyarerequired
• Iwilldiscusssomeoftherecommendedreadingsinthelecture
• Alllinksonthesyllabus
• Letmeknowifoneisbroken
Midtermassignmentandexam
• Designedtorewardreadingalongtheway
• IwillgiveyouXessayquestionsinadvance
• IwillgiveyouY<Xquestionstoansweronthemidterm/final
• Alllecturematerialandrequiredreadingsaretestable
• Youshouldworkindependently,asoriginalinsightswillberewarded
• Themidtermwillbeatakehomeassignment,andyouwillbeallowedtobringyourlaptopforthefinal
Wikipedia-basedassignments
• You’regoingtointegratemoresocialscienceintoWikipedia
• EachofyouwillberesponsibleforchoosingahandfulofarticlesandideasfromthereadingstoincorporateintoWikipediaarticles
• We’regoingtoteachyouwhatyouneedtoknow,startingnextweek
• WhatyouneedtodoBYMONDAY– FollowthelinktotheWikipediacoursepageIsentyou(orseeonChalk
site)– Joincoursewithsignupcode,registerwithWikipediaandcomplete
trainingbeforeclassbeginsApril3.– Thisis(asmallpartof)yourgrade
Week1objectives
• Whyisordervaluable?– Protectpeoplefromviolence– Lowertransactioncostsandrisk,promotingspecializationandtrade
• Howhavesocietiesproducedorder?– Cooperation,states,andbandits
• Earlystatesasorganizedcrime– Statesprovideprotectionandgovernanceinreturnfortaxandtribute– Haveoftenbeencoercive,andemergedthroughconquest
• Whyisitdifficultforpeopletocooperatewithoutstatesandcoercion?– Needtosolvecommitmentproblemsandovercomeinformation
asymmetries– Thesearetheconditionsthatproduceviolence
EverydaydisputesA2010surveyof250townsandvillages
6%
7%
3%
2%
8%
20%
48%
28%
Murder
Rape
Inter-tribal violence
Violent strike or protest
Peaceful strike or protest
Disputes with other towns
Inter-family land disputes
Youth-elder disputes
Disputes reported by town leaders
6%
13%
6%
12%
22%
Any money dispute that results in
violence, property destruction or threats
Any serious money/business
dispute in past year
Any land dispute currently unresolved
Any land dispute that results in violence,
property destruction or threats
Any serious land dispute in past year
Disputes reported by residents
Localslargelyresolvethesedisputesviainformalrules(socialnorms)thatdevelopwithouttheaidofastate
• Itcanbecostlytolearnthelawandenforcerightsthroughformalcourtsystems
• Transactioncostsfromdisputeresolutionarelowerifinformal,commonsensenormscanbefollowedandenforcedthroughthethreatofsanctions
• Here,ifacowdamagescrops,ranchersareexpectedtobegoodneighborsandcompensatethefarmer
– Cheaperthanbuildingfences
• Partofalargelibertariantraditionof“lawandorderwithoutlegislation”
Example3:AverydifferentoutcomeinSicily’sblackmarketforcattle
Nostatetoenforcecontracts
There’salsolittletrust:buyerscan’ttrustthequalityoftheseller’scow,andsellerscan’ttrustbuyerstopay
Alocalbigmanstepsintoprovideinformationtoeachsideandguaranteethesale
Thebigmanmayalsoenforcescontractswiththethreatofviolence
Heisabrokersoftrustbetweenbuyersandsellers
Themafiastepsinwherethestateandsocietydonot
Alocalbigmanstepsintoprovideinformationtoeachsideandguaranteethesale
Thebigmanmayalsoenforcescontractswiththethreatofviolence
Heisabrokersoftrustbetweenbuyersandsellers
Heproduces,promotes,andsellsprivateprotection
Thisisalubricanttothemarket,reducingthecostoftransactions
From200–400localyouthgangscity-wide
• 30-60menaged11-35
• Littlestates-within-a-state– Settledisputesbetween
households– Regulatemarkets– Preventsomeformsof
insecurity(outsidetheft)– Collect“taxes”through
extortion
• Beganinlowerincomeneighborhoods,amongdisplaced,whenstatedidnotprovideservices
Thirdpartieslikegangsandgovernmentsdomorethanjustsellprotection
• Coordinatepublicgoods,likeexternaldefense
• Brokertrustbydefiningandenforcingpropertyrightsandcontracts
• Adjudicatedisputesandreducethecostandrisksoftransactions
• Stoppeoplefromtakingharmfulactionstowardsothers(externalities)
• Reduceorregulatesexualviolence
• Provideemploymentthroughregulatedmarkets
Example5:The“DarkWeb”
http://shenlinlab.com/Blog%20Topics%20html/FDA%20Law%20Blog%205%20The%20Dark%20Web.html#.Vp_EG_FrW3U
Inananonymousmarket,trustisevenhardertomaintainthanaruraltown.Ifbuyersarehesitantenough,sellerswillhaveno-one
tosellto,and themarketwillfallapart.
http://descrier.co.uk/technology/darknet-marketplace-silk-road-shut-fbi/
AsinruralSicily,awellfunctioningmarketneedsintermediariesandguarantees
Ihavebeenscammedmorethantwicenowbyassholeswhosaythey’relegitwhenIsayIwanttopurchasestolencreditcards.IwanttodotonsofbusinessbutIDONOTwanttobescammed.Iwishtherewerepeoplewhowerehonestcrooks.Ifanyonecouldhelpmeoutthatwouldbeawesome!IjustwanttobuyoneatfirstsoIknowthesellerislegitandhonest.
—AnonymouscommenterondarkInternetmarket
• Canprovideinformation
• Canguaranteeacontract
• Canenforcecontractsifneedbe
“
H. Farrell (2015). “Dark Leviathan: The Silk Road might have started as a libertarian experiment, but it was doomed to end as a fiefdom run by pirate kings.” Aeon.
Libertarianactivistandbusinessman:RossUlbrichtofTexas,a.k.a.the“DreadPirateRoberts”:Setsouttobuildamarketfreefrom
thethievingandmurderousstate
http://www.coindesk.com/ross-ulbricht-found-guilty-operating-silk-road-dark-market/
TokeepSilkRoadfromunraveling,Ulbrichtdevelopscentralizedmarketmanagement,defense,adjudicationandpunishment
• Introducedautomatedratingsystemandpaymentinescrowtoestablishcredibility
• Beganpolicingthesystem,banninguntrustworthybuyersandsellers
• Paidhundredsofthousandsofdollarstostaveoffdenial-of-serviceattacksthatthreatenedtocripplehiswebsite
• Eventually,turnedtoviolence.Oneseller,FriendlyChemist,threatenedtoleakthenamesofallitscustomers,threateningcredibilityofSilkRoad– “Hepaid$150,000tosomeonewhomhebelievedtobesenior
memberoftheHellsAngelstoarrangeforthemurderofhisblackmailer,laterpayinganother$500,000tohaveassociatesofFriendlyChemist murderedtoo.”
Freemarketsandfreeassociationcanbecostlytocoordinateandtransact
• Communitiesandmarketscanoperatemoreeffectivelyiftheysomehowcan:– Defineandenforcepropertyrightsandcontracts– Adjudicatedisputes– Preventpeoplefromtakingactionsthatharmothers(negativeexternalities)
– Managecommunalresources– Cooperateonsystemsofmeasurementandexchange– Minimizetheuseofforce
Differentstructurescanproduceorderandreducethecostsofcoordinatingandtransacting
• Societiescanevolveinformalwaysofcooperation,e.g.– Normsofdisputeresolutionandinformaljustice– Marketassociations
• Inothercases,orderisprovidedbyastableandeffectivestates
• Oftentimes,warlordsandmafioso supplyprotectionwherestatesandsocietiesdonot– Inmarketsforillegalgoods– Inblackmarketsthatevadetaxesorregulation– Inspacesdistantfromgovernmentreach– Incaseswheregovernmentinstitutionsaretooslow,ineffective,or
corrupt
Butbeingpreyeduponbymany mafiosos andwarlordsisalmostalwaysinefficient
• Mafiascanmakemarketsmoreefficientthananarchy– Makemoneybyprovidinginformation,guaranteeingtransactions,
threateningcheaters
• Butmanysourcesofinefficiency– Threatenandextort– Incentivestocultivateanatmosphereofparanoiainordertoensure
demandfortheirservices– Mayeliminatetraditionalsourcesoftrustandenforcement,formaland
informal
• Thecitizenryareacommonpoolresource andhenceviolenceisoverproduced
Mancur Olson:Thestationarybanditisonesolutiontothecommonresourceproblem
• Insmallgroupsvoluntaryagreementcanproduceorder,butthisbecomeshardertodoinlargergroups– Peoplecanfreeride,andasgroupgetslargerthisbecomeshardertocontrol– e.g.transitionfromsmallhunter-gathererbandstomoresettled,denser
agriculturalsocieties
• Largersocietiesattractrovingbandits(mafiosos,warlords)
• Thesesocietieswillpreferastationarybandit,continuouslystealingalittlefromthem– Rationalself-interest– Ifthestationarybandittakestoomuch,peoplewillreducewhattheyproduce
• Thusthebandithasanincentivetotakejustenoughthatthemarginaldollartaxeddoesnotdecreaseproductionenoughtolowertotalrevenues
Bandit’sPayoffs
Time
+
–
Maintain political order and extract
Steal as much as possible
Asimplemodelofstationaryvs.rovingbandits
Time
Civilian production valuable and can be
taxed or coerced
Civilian production less valuable or easily
hidden
Steal as much as possible
Whydomafiosos inSicily,Medellin,andtheDarkWebchoosetoprovideorder?
Bandit’sPayoffs
+
–
Example6:EasternCongo• Failedstate
• Multiplewarringarmedgroups
• Moderninstanceofrovingbandits?
https://ethuin.files.wordpress.com/2015/11/crg-2015-drc-mapping-essay-en.pdf
Rovingbandits:Armedgroupsrobandfleeisolatedvillages
CourtesyofRaulSanchezdelaSierra,seehttps://raulsanchezdelasierra.files.wordpress.com/2013/09/0-paper-1.pdf
RaulSanchezdelaSierra:Twocommoditypriceshocks.Howdoarmedgroupsrespond?
CourtesyofRaulSanchezdelaSierra,seehttps://raulsanchezdelasierra.files.wordpress.com/2013/09/0-paper-1.pdf
Coltan isverybulky,productioniseasilytracked
CourtesyofRaulSanchezdelaSierra,seehttps://raulsanchezdelasierra.files.wordpress.com/2013/09/0-paper-1.pdf
Goldnotsomuch
CourtesyofRaulSanchezdelaSierra,seehttps://raulsanchezdelasierra.files.wordpress.com/2013/09/0-paper-1.pdf
Ruler’s Payoffs
Time
+
–
Rise in price of easily taxed
coltan
Warlord income stream
Incentivestobecomestationarybandits
Coltan,notgold,leadstoanincreaseinconquestofterritory,taxation,andservices
• Armedgroupsbeginprovidingbasicservices:justice,security,roads
• Effectsarelargestclosertoairports,wheremineraltradecostsarelowest
• Attemptstotaxgoldleadtomoreviolence,dislikedadministration
• Uncleartowhatextentthereisa“socialcontract”
CourtesyofRaulSanchezdelaSierra,seehttps://raulsanchezdelasierra.files.wordpress.com/2013/09/0-paper-1.pdf
Thesehavebeenstoriesofstationarybanditsthroughconquestandcompetition
1. Startwithanarchicsituations– Liberiaandthetroubleofresolvingdisputes– TheDarkWebandtheSilkRoad
2. Mafiosos andotherwarlordsemergeasbrokersoftrustandcontractenforcers– SicilianandMedellingangsters– TheSilkRoad’sDreddPirateRoberts
3. Theycompetewithotherbanditsand“overfish”citizens
4. Sometimestheymanagetoeliminaterivalsandcreatea“monopolyofviolence”– Thiscanbebetterthantherovingbanditsituationforall– Someconditionspromotethismorethanothers
Publishedattheendofa9-yearEnglishCivilWarDeathratesfrommilitaryconflictsinEngland,1170s-1900s
http://ourworldindata.org/data/war-peace/war-and-peace-before-1945/#death-rates-from-military-conflicts-in-england-1170s-1900s-clark-2008refviaClark(2008)– AFarewelltoAlms:ABriefEconomicHistoryoftheWorld.PrincetonUniversityPress.
Anarchyasthe“Warofallagainstall”
duringthetimemenlivewithoutacommonpowertokeepthemallinawe,theyareinthatconditionwhichiscalledwar;andsuchawarasisofeverymanagainsteveryman.
[Lifeis]solitary,poor,nasty,brutish,andshort
—Leviathan(1651),ChaptersXIII&XIV
“
“
Hobbes’solution:Asocialcontractthatproducesastationarybandit
• Thewarofallagainstallavoidedbya“socialcontract”thatallowsanabsolutesovereigntocometopower
• Legitimateauthoritybackedbythreatofforce
– Threatofpunishmentpreventspeoplefromviolatingothers’rights
– Asolutiontothecommonpoolresourceproblem
Time
Commit to ruler’s rights to taxation,
primogeniture, etc.
War of all against all
Asocialcontractinoursimplemodel
Bandit’sPayoffs
+
–
Limit ruler’s ability to tax and time to rule
Howcredibleisthis“socialcontract”view?
• Ontheonehand,it’sasillyidea– Impliesthatsocietycallsforthsomekindofgovernor,andthatroving
banditscompetetooffertheirservicestowillingcommunities– Historysuggeststhatthesebanditshavebeencoercive,selfish
entrepreneurswhohaveconquored ratherthanbeinvited
• Ontheotherhand,onceacommunityhasastationarybandit,howmanywouldchooseareturntoanarchy?– Recallthatorderhasvalue
InMedellin,itishardtosaywhethercommunitiespreferthegangstothealternative
• Largelydependswhatpeoplethinkofasthealternative– Anarchy?– Increasedpresenceofthe
state?– Cooperativeorganization?
Wherewearegoingtotakethis(inWeek3):Whatisastate,howdotheyemerge,&whatmakesthemstrong?
“Stateless”Chiefdoms,
bands,andothersmallpolitical
units,oftenwithinformalsystems
ofrule
“Earlystates”Larger,more
hierarchical,oftencoercivepoliticalauthority(ies)thatmayonlylooselycontrolthepeople
“Modernstates”Morecentralized,rule-governed,bureaucratic,
depersonalized,politicalorgani-zations withmoresocialandsovereignterritorialcontrol
Let’sreviewWeek1objectives
• Whyisordervaluable?– Protectpeoplefromviolence– Lowertransactioncostsandrisk,promotingspecializationandtrade
• Howhavesocietiesproducedorder?– Cooperation,states,andbandits
• Earlystatesasorganizedcrime– Statesprovideprotectionandgovernanceinreturnfortaxandtribute– Haveoftenbeencoercive,andemergedthroughconquest
• Whyisitdifficultforpeopletocooperatewithoutstatesandcoercion?– Needtosolvecommitmentproblemsandovercomeinformation
asymmetries– Thesearetheconditionsthatproduceviolence
Whydoweneedabandittoprovideorder?Whycan’tpeoplecooperatewithoutgivingthe
monopolyofviolencetoathug?
(We’regoingtotacklethisinmoredepthinWeek5,butthisisactuallygoingtoleadus
intotheoriesofconflict)
Let’sgobacktoourLiberiaexample.Whycouldn’tpeoplesolvedisputesontheirown?
6%
13%
6%
12%
22%
Any money dispute that results in violence,
property destruction …
Any serious money/business
dispute in past year
Any land dispute currently unresolved
Any land dispute that results in violence,
property destruction …
Any serious land dispute in past year
Any money dispute currently unresolved
Inruralareasthereislittleformalstatepresence
• Legalrulesandlawsunclear,unavailable
• Civilandcriminalcourtscorrupt,expensiveandinaccessible
• Thefewpoliceareuntrained,poormobility,andcorrupt
• Competingandinconsistentbodies
Inprinciple,“informalinstitutions”canfillthegap
• Shared,unwrittenrulesofappropriatebehaviorenforcedthroughsocialsanctionandpraise
• Inthecontextofconflict,thesecanfacilitatebargainingandenforcement– Negotiation
• Decentralizedbargaining
– Mediation• Eldercouncils,chiefs,civilsociety,neighbors
ButLiberia’sinformalinstitutionsleaveroomforimprovement
Functionpoorly• Difficulttoreachbargains
– Don’tknowhowstronglyotherpartyfeels
– Don’tknowhowlongtheotherpartyiswillingtoholdout
• Difficulttoenforcebargains– Nocentralauthority– Reliesonsocialenforcement
• Problemisnotabsenceofinstitutionsbutmultiple,competingones– “Forum-shopping”– Defection
Canundermineruleoflaw• Inconsistentlyapplied
– Unequalapplication
• Potentialforbiasandinequality– Reinforcespowerimbalances– Mayviolateconstitutionalrights
• Illegaljustice– Extrajudicialviolence
Speakstotwogeneralreasonswhybargainingbreaksdown
1.Asymmetricinformation• Weeachknowourown
strengthandcostofholdingoutorfighting,butnottheotherperson’s
• Theoptimalstrategyisto“holdout”– Takeastrongposition– Graduallyconcedealittleata
time– Eventuallythepartywiththe
highestcostofholdingoutconcedes
• Leadstodrawnoutbargainingwithriskofbreakdown
2.Commitmentproblem• Thereexistsabargain,but
wecannottrusttheotherpartytoupholdit
• Rangeofenforceablebargainsthatavoidfightingcouldbesmallorzero
• Ifyouthinkpowerwillshiftinfuture,youhaveanincentivetostrikenow
Now:Caninformalinstitutionsofdisputeresolutionbefostered?
• ProgrambytheUN,GovernmentofLiberia,&localNGOin86smalltowns
• Intensivetrainingin“alternativedisputeresolution”(ADR)techniquesandnorms
• Aimedtoimprovethefunctioningofinformalinstitutionstoreduceinformationasymmetriesandimprovecommitmentwithoutcoercion
Changingskillsandnorms
• Aimedtoget15%ofeachtown’sadultsintoeightdaysofclassesspreadoverseveralmonths
• ThisispartlybecausetheywantedtoinstillADRskillswidely
• Butalsobecausetheywereexplicitlythinkingaboutwhatcoveragewasneededtochangesocialnorms– Generallyacceptedunderstandingof
howpeoplewillandoughttobehave– Andsocialsanctions/pressureto
enforce
ADRthroughthelensofnon-cooperativebargaining
1.Reduceinfoasymmetries• Teachesskillsandpractices:
– maintainingempathy– keepingcommunicationopen– buildingtrust
• Mediatorselicitinformation
• Instillnorms– Provideincentivesto
• Shareinformation• Haveempathy
– Emphasizemoresymmetricbargains
2.Increasecommitment• Discourage
– Defection– Forumshopping
• Legitimateinformalnegotiation
• Raisecostsofnon-cooperation– Socialsanctioning– Socialesteem
ADRthroughthelensofnon-cooperativebargaining
3.Speedbargaining,avoidbreakdown• Teachestechniquesfor:
– Managinganger– Recognizingbiases– Behave“rationally”
• Encourages– Engagedirectlyindisputes– Keeppeopleatthetable
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Lofa
Nimba
Sinoe
Bong
Gbarpolu
Grand Gedeh
Grand Bassa
River Gee
River Cess
Grand Kru
BomiMargibi
Grand Cape Mount
Maryland
Montserrado
0 50 10025Kilometers
Liberia Study Communities
±
Persons per sq km (2008 Census)
Less than 10
10-25
25-50
50-100
100-500
More than 1000
!( Study Community
County Boundary
Weconductedarandomizedcontroltrial
• Randomizeinterventionatcommunitylevel
• 246communitiesnominated– 116assignedto
treatment
• Rolloutover20months– Mar2009- Nov2010
• Randomizeorder(5phases)
• Programhaltsafterphase4– These86arandom
subsetof116– 160controls
Sierra Leone
Guinea
Cote d’Ivoire
Monrovia
Theresultssuggestthatskillsandnormscanbefostered,atleasttemporarily
Intendedconsequences Unintendedconsequences• Nodecreaseinthenumberof
disputes
• ButIncreasedtherateoflandconflictresolution– Especiallylongstandingdisputes
• Reducedviolence(especiallypropertydestruction)
• Contagiousbeyonddirectlytreated
• Persistentovertwoyears
• Fadedafterthreeyearssomewhat,inpartbecausedisputeslessen
• Noincreaseinresolutionofotherdisputes
• Moredisputes,withmoregusto– Butgenerallypeaceful
• Increasedextrajudicialpunishment
It’sdifficulttosettledisputesandreducetransactioncoststhrough
cooperationalone.
Thuswebegintoseesomeoftheadvantagesofstatesorevenmafias
ConflictsinLiberiamightbelesslikely,lesslasting,andlessviolentwithclearandconsistentlaws,accessiblecourts,able
andresourcedpolice
Californiahadseveraladvantages
1. Easiertomaintaintrustinsmall,closeknit,relativelynon-changingcommunities
2. Engagedinregularexchange(hencearepeatedgame)
3. Theyoperatedinthe“shadowofthelaw”
4. (Maybe)Americancultureevolvedmoreeffectiveinformalinstitutions
DavidSkarbekonLosAngelesprisongangs
• Thestateoutlawscurrency,communications,drugs,andothergoodsandservicesinprison
• Thiscreatesablackmarketwherethestate(theprison)cannotenforcecontractsorreducetransactioncostsandrisks
• Whenprisonpopulationsweresmallandpeoplewerenotmovedfromprisontoprisonmuch,informalsystemsofordersufficed
• Butastheprisonsystemandpopulationgrew,andtransfersandtrafficincreased,theinformalsystemscouldnotcope
e.g.The“MexicanMafia”
• ThemostpowerfulprisonganginCalifornia,andoneofthebestorganizedcriminalsenterprisesinUS
• Likemostprisongangs,organizedracially
• HastwoofthekeyfeaturesofOlson’sstationarybandit:– Theabilitytoforciblyextractresources(Cancrediblythreatentoharm
Hispanicsinprisonshouldtheybecomeincarcerated,oriftheyhavefriendsandfamilyincarcerated)
– Longtimehorizon(lifetimemembership,longjailsentences)
• ControlandextortHispanicdrugdealersoutsidetheprison,whopaytaxesof10-30%perweek
• Providegovernanceservices,protectingSureño membersinjailandonstreet,enforcingtransactionsaswellascreditandinsurancemarkets
Ininternationalrelationstheory,“anarchy”istheideathattheworldlacksanysupremeauthorityorsovereign toprovide
commitmentandmitigateinformationasymmetries