Friday, July 21, 2006

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When will statebuilding be hard?

I've been remiss in not giving the necessary props to Austan Goolsbee as the quasi-new columnis for the New York Times' Economic Scene.

His latest column -- on how to tell when war-torn states will be able to recover -- is an excellent precis of what the literature says:

With little prospect of a quick resolution to most of these conflicts, perhaps it is worth looking at the long-run prospects for these nations once the wars actually end (assuming that they do end, of course).

The good news is that history suggests that the destruction of war has no lasting impact on economic prospects. The bad news is that most of these countries, especially Iraq, are filled with ethnic divisions and civil discord. The evidence shows that these problems, unlike bombs, cause lasting damage to the prospects for a nationís economy, even if they do not boil over into civil war....

Viewed from this perspective, the long-term economic prospects for Afghanistan and Iraq do not look good. It is not the destruction of war. That will end and the countries can be rebuilt. It is the fragmentation and ethnic hatred. That, typically, never goes away.

Iraq, especially, is a straight-edged, ethnically partitioned nation wracked with internal strife. And having oil wealth is unlikely to save the day. Fragmented countries with natural resources often do worse because civil war rages over who gets to keep the money. Some of the poorest countries in Africa, for example, are actually quite well endowed with diamonds and other resources.

Read the whole thing.

posted by Dan on 07.21.06 at 01:51 PM




Comments:

You're drifting off the reservation. I thought it was all about Bushie incompetence. Truly competent leadership (John Kerry!) could fix ethnic strife in a trice.

Goolsbee's column reminds me of something I think Tyler Cowen pointed to after Katrina: that prospects for rebuilding a city depend ultimately on whether the city was growing economically before catastrophe. The fundamentals for growth (or peace) are not altered by the catastrophe, costly as that may be.

posted by: Norman Pfyster on 07.21.06 at 01:51 PM [permalink]



"never" goes away? "Never"? Yeah, look at how completely unable Italy is to function. Those Etruscans, Vandals, and Romans will never be able to share a nation! In the US, it appears unlikely that the Indian Wars will restart any time soon. The Maoris aren't a big threat in Wellington. The German states seem to get along OK, and the Spanish.

Ethnic divides can persist, but there's no neccessity for it, and you can totally build nations despite a little racial antipathy (Taiwan, the Baltic states, the UK, and India all spring to mind).

posted by: James of England on 07.21.06 at 01:51 PM [permalink]




You're drifting off the reservation. I thought it was all about Bushie incompetence.

I'm not sure its all about it, but its definitely a great part of it. Everyone with a clue warned of this possibility pre-war. Our Great Leader could not tell the differnce between a Shia and a Sunni, and yet wanted to transform the whole ME

posted by: erg on 07.21.06 at 01:51 PM [permalink]



If I were Bush and my advisors had come to me insisting that taking down Saddam would lead to a democratic Iraq, I would have asked the following question: "Can you name a single state in the world that has Iraq's level of ethnic/religious fractionalization and also relies on a single natural resource for much of its economic wealth that is also a democracy?"

posted by: mrjauk on 07.21.06 at 01:51 PM [permalink]



It is the fragmentation and ethnic hatred....
There are some groups of expat Iraqis that are working towards promotion of democracy and human rights in Iraq.For the challenges faced by the expat Iraqi community see this article by Ariel Ahram in the Middle East review of international affairs (Meria) journal

http://meria.idc.ac.il/journal/2005/issue1/jv9no1a6.html

posted by: ajit on 07.21.06 at 01:51 PM [permalink]



My memory is a bit fuzzy but I was under the impression that many studies have found a correlation between conflict and poor economic performance (e.g., Paul Collier, et al). Isn't there something called the "conflict trap"? Studies that only look at Vietnam or Europe may not really capture the effect of conflict on economic performance. The point is that I am not sure this NYT article truly captures the literature on this subject.

posted by: Jeff Meiser on 07.21.06 at 01:51 PM [permalink]



If it was "straight-edged" it would be easier, wouldn't it?

Hesbolla fires one artillery shell with a sarin-filled tip into Israel. Israel fires one artillery shell with a sarin-filled tip into Beirut. At least they wouldn't be WMD's, would they?

Vanity, vanity. Honesty, honesty.

Thank you.

posted by: Thomas Esmond Knox on 07.21.06 at 01:51 PM [permalink]



There are deep ethnic divisions in the old East Block that I was sure were going to erupt, but didn't. I was expecting things similar to the Bosnian situation to erupt with the Hungarians of western Rumania and the Turks in Bulgaria, but it hasn't happened.

I don't know if the apparent comity in those nations can be attributed to prosperity though. I admit I haven't looked into it, but I never hear of Bulgaria or Rumania being touted as economic success stories, like you sometimes hear about Hungary. In fact, one of the most prosperous of the ethnically amalgamated ex-east block nations, Czechoslovakia, split, albeit amicably.

posted by: Njorl on 07.21.06 at 01:51 PM [permalink]






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