The Pandemic Depression
The Global Economy Will Never Be the Same
Throughout its history, the United States has oscillated between two foreign policies. One aims to remake other countries in the American image. The other regards the rest of the world as essentially beyond repair. According to the second vision, Washington should demonstrate the benefits of consolidated democracy—free and fair elections, a free press, the rule of law, the separation of powers, and an active civil society—but not seek to impose those things on other countries. The George W. Bush administration took the first approach. The Obama administration took the second, as has the Trump administration, choosing to avoid actively trying to promote freedom and democracy in other countries.
Both strategies are, however, deeply flawed. The conceit that the United States can turn all countries into consolidated democracies has been disproved over and over again, from Vietnam to Afghanistan to Iraq. The view that Washington should offer a shining example but nothing more fails to appreciate the dangers of the contemporary world, in which groups and individuals with few resources can kill thousands or even hundreds of thousands of Americans. The United States cannot fix the world’s problems, but nor does it have the luxury of ignoring them.
Washington should take a third course, adopting a foreign policy that keeps the country safe by working with the rulers the world has, not the ones the United States wishes it had. That means adopting policies abroad that can improve other states’ security, boost their economic growth, and strengthen their ability to deliver some services while nevertheless accommodating a despotic ruler. For the purposes of U.S. security, it matters more that leaders in the rest of the world govern well than it does that they govern democratically. And in any case, helping ensure that others govern well—or at least well enough—may be the best that U.S. foreign policy can hope to achieve in most countries.
Homo sapiens has been around for about 8,000 generations, and for most of that time, life has been rather unpleasant. Life expectancy began to increase around 1850, just seven generations ago, and accelerated only after 1900. Prior to that point, the average person lived for around 30 years (although high infant mortality explained much of this figure); today, life expectancy is in the high 70s or above for wealthy countries and approaching 70 or more for many poor ones. In the past, women—rich and poor alike—frequently died in childbirth. Pandemic diseases, such as the Black Death, which wiped out more than one-third of Europe’s population in the fourteenth century, were common. In the Western Hemisphere, European colonists brought diseases that devastated indigenous populations. Until the nineteenth century, no country had the rule of law; at best, countries had rule by law, in which formal laws applied only to some. For most people, regardless of their social rank, violence was endemic. Only in the last century or two has per capita income grown significantly. Most humans who have ever lived have done so under despotic regimes.
Most still do. Consolidated democracy, in which the arbitrary power of the state is constrained and almost all residents have access to the rule of law, is a recent and unique development. The experience of people living in wealthy industrialized democracies since the end of World War II, with lives relatively free of violence, is the exception. Wealthy democratic states have existed for only a short period of history, perhaps 150 years, and in only a few places in the world—western Europe, North America, Australasia, and parts of Asia. Even today, only about 30 countries are wealthy, consolidated democracies. Perhaps another 20 might someday make the leap, but most will remain in some form of despotism.
The United States cannot change that, despite the hopes of policymakers who served in the Bush administration and scholars such as the political scientist Larry Diamond. Last year, Diamond, reflecting on his decades of studying democratization all over the world, wrote that “even people who resented America for its wealth, its global power, its arrogance, and its use of military force nevertheless expressed a grudging admiration for the vitality of its democracy.” Those people hoped, he wrote, that “the United States would support their cause.” The trouble is that, regardless of such hopes, despotic leaders do not want to provide benefits to those they govern; they want to support with arms or money those who can keep them in power. They will not accept policies that aim to end their rule. What’s more, organizing against a despot is dangerous and unusual. Revolutions are rare. Despots usually stay in power.
Yet although the United States cannot build wealthy democracies abroad, it cannot ignore the problems of the rest of the world, either, contrary to what Americans have been told by people such as U.S. President Donald Trump, who in his first speech after he was elected said, “There is no global anthem, no global currency, no certificate of global citizenship. We pledge allegiance to one flag, and that flag is the American flag. From now on, it’s going to be America first, OK? America first. We’re going to put ourselves first.”
Revolutions are rare. Despots usually stay in power.
The trouble with wanting to withdraw and focus on home is that, like it or not, globalization has indeed shrunk the world, and technology has severed the relationship between material resources and the ability to do harm. A few individuals in badly governed and impoverished states control enough nuclear and biological weapons to kill millions of Americans. And nuclear weapons are spreading. Pakistan has sold nuclear technology to North Korea; the North Koreans might one day sell it to somebody else. Nuclear weapons could fall into the hands of jihadi groups. Pandemic diseases can arise naturally in badly governed states and could spread to the developed world, killing millions. The technology needed to create artificial pathogens is becoming more widely available. For these reasons, the United States has to play a role in the outside world, whether it wants to or not, in order to lower the chances of the worst possible outcomes.
And because despots are here for the foreseeable future, Washington will always have to deal with them. That will mean promoting not good government but good enough governance. Good government is based on a Western ideal in which the government delivers a wide variety of services to the population based on the rule of law, with laws determined by representatives selected through free and fair elections. Good government is relatively free of corruption and provides reliable security for all citizens. But pushing for elections often results only in bloodshed, with no clear improvement in governance. Trying to eliminate corruption entirely may preclude eliminating the worst forms of corruption. And greater security may mean more violations of individual rights. Good government is not in the interests of the elites in most countries the United States wants to change, where rulers will reject or undermine reforms that could weaken their hold on power.
A foreign policy with more limited aims, by contrast, might actually achieve more. Greater security, some economic growth, and the better provision of some services is the best the United States can hope for in most countries. Achieving good enough governance is feasible, would protect U.S. interests, and would not preclude progress toward greater democracy down the road.
Policies aiming for good enough governance have already succeeded. The best example comes from Colombia, where for the past two decades, the United States has sought to curb violence and drug trafficking by providing financial aid, security training, military technology, and intelligence under what was known until 2016 as Plan Colombia (now Peace Colombia). The results have been remarkable. Between 2002 and 2008, homicides in Colombia dropped by 45 percent. Between 2002 and 2012, kidnappings dropped by 90 percent. Since the turn of the century, Colombia has improved its scores on a number of governance measures, including control of corruption, the rule of law, government effectiveness, and government accountability. That progress culminated in 2016 with a peace deal between the government and the guerilla movement the FARC (Revolutionary Armed Forces of Colombia).
Yet despite Plan Colombia’s success, it has not transformed the country. Violence has declined, but Colombia is not yet on the path to becoming a consolidated democracy. A narrow elite still dominates the country. Colombia’s high economic inequality has not budged. Elections matter, but they serve mostly to transfer power from one segment of the ruling class to another.
Colombia’s elites accepted intrusive U.S. assistance not because they were committed to making the country a consolidated democracy but because, by the 1990s, violence in Colombia had reached such an extreme level that the country was near collapse. Without U.S. help, the elites would not have been able to maintain their position. Plan Colombia provides both a model for U.S. intervention elsewhere and a sobering reminder of the limits of change that can be brought from the outside.
American naiveté about the likelihood of creating wealthy democratic states has been based on a widely held view of development and democracy known as “modernization theory.” This theory holds that wealth and democracy can be attained relatively easily. All that is necessary are population growth and technological progress. Greater wealth begets greater democracy, which in turn begets greater wealth. If countries can find the first step of the escalator, they can ride it all the way to the top. Yet modernization theory has a conspicuous failure: it cannot explain why consolidated democracy has emerged only very recently, only in a small number of countries, and only in certain geographic areas.
U.S. leaders have also been influenced by a second perspective on development, one that emphasizes institutional capacity. They have usually assumed that rulers in poorly governed states want to do the right thing but fail because their governments do not have the capacity to govern well, not because the rulers want to stay in power. But theories that stress institutional capacity fall at the first hurdle: they cannot explain why leaders in most countries would want to act in the best interests of their populations rather than in their own best interests.
U.S. leaders would be more successful if they adopted a third theory of development: rational choice institutionalism. This theory emphasizes the importance of elites and stresses that only under certain conditions will they be willing to tie their own hands and adopt policies that benefit the population as a whole.
The sweet spot, in which the government is strong enough to provide key services but does not repress its people, has been achieved by only a few polities. As James Madison wrote in The Federalist Papers, no. 51, “In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.” No wiser words on government have ever been written.
More wealth and a large middle class may make democracy more likely, but they do not guarantee it.
Rational choice institutionalism makes it clear that wealth and democracy are not the natural order of things. More wealth and a large middle class may make democracy more likely, but they do not guarantee it. Luck matters, too. If the wind had blown in a different direction in June 1588, the Spanish Armada might have been able to support the Duke of Parma’s invasion of England. Queen Elizabeth I would probably have been deposed. Great Britain might never have become the birthplace of the Industrial Revolution or the cradle of liberty. Likewise, in 1940, if the waters of the English Channel had prevented the small boats from rescuing the British Expeditionary Force from Dunkirk, the British government might have sought peace, and Nazi Germany might have been able to devote all its resources to the defeat of the Soviet Union. The outcome of World War II might have been very different.
Pointing out that outside actors cannot usually create democracy, effective government, and a free-market economy hardly amounts to a revelation. The successes in West Germany, Italy, and Japan after World War II were aberrations made possible by the power of the United States, the delegitimization of fascist governments, and the existence of local members of the elite who saw aligning with Washington as the best of difficult choices. General Douglas MacArthur allied with the emperor of Japan rather than trying him as a war criminal. Hirohito was no democrat. But the alternative, a communist system, was even worse.
There is no teleological trajectory, no natural and inevitable path from extractive, closed states to inclusive, open states. Sustained economic growth and consolidated democracy have eluded most societies. Progress requires aligning the incentives of repressive elites with those of the repressed masses. This has happened rarely and has depended on many factors that cannot be controlled by outside powers.
The United States can still exert influence on the rest of the world, but it must carefully tailor its strategy to fit the circumstances. There are three main kinds of countries: wealthy, consolidated democracies, countries that are transitional (with a mix of democratic and nondemocratic features), and despotic regimes.
Of the world’s wealthy countries, defined as having a per capita annual income greater than $17,000, around 30 are consolidated democracies according to the measures used by the Center for Systemic Peace’s Polity Project, which rates the democratic quality of countries on a scale of negative ten to ten. All the consolidated democracies (with the exception of Australia and New Zealand) are in East Asia, Europe, or North America. The United States can best help these countries by working to perfect its own democracy, as well as strengthening the U.S. alliance system, containing or deterring threats to the U.S.-led order, keeping trade barriers low, and sharing intelligence.
Demonstrating the effectiveness of democracy is not an easy task. The U.S. Constitution is difficult to change. What worked at the end of the eighteenth century does not necessarily work today. The U.S. Senate is growing less democratic as the population ratio between the most populous and the least populous state increases. That ratio was about 13 to 1 (Virginia to Delaware) when the Constitution was written; it is now more than 60 to 1 (California to Wyoming). This means that a small part of the population (less than 20 percent) can frustrate legislation. The Internet has changed political communication. Anyone can publish anything, including groups acting at the direction of foreign entities, which can now influence U.S. politics far more cheaply and easily than in the past. And as digital technology advances, distinguishing between true and false information will only become harder.
To help countries become consolidated democracies, support the right local leaders.
Imperfect though American democracy may be, Washington can nevertheless help countries that are in transition. The best chances exist in the 19 countries with per capita annual incomes between $7,000 and $17,000 and Polity scores of six or higher, a group that includes Botswana, Brazil, Croatia, Malaysia, and Panama. The most promising candidates in this group are former satellite states of the Soviet Union, such as Bulgaria and Romania, which have relatively high incomes and levels of education, robust EU development programs, and, in many cases, leaders who want their countries to be a part of Europe.
The key to helping these places reach consolidated democracy is to identify and support the right local leaders. Even democratic elections, after all, can produce leaders with little commitment to democracy, such as Brazilian President Jair Bolsonaro and Turkish President Recep Tayyip Erdogan. And some leaders who have only a limited commitment to democracy can prove to be valuable partners, as Hirohito did in Japan after World War II.
Knowing which leaders are likely to deliver good enough governance—regardless of their commitment to democracy—requires an intimate knowledge of local elites, their beliefs, and their followers. To that end, the U.S. State Department should alter its practice of moving Foreign Service officers from post to post every two or three years and instead institute longer stays so that they can develop a close, deep understanding of the countries to which they are assigned. The department will also need to find ways to allow Foreign Service officers to have greater access to and more influence with top decision-makers.
With luck, the United States, working with other advanced democracies, might succeed in moving some countries toward consolidated democracy and the greater wealth that comes from unleashing individual initiative and constraining the state from seizing its fruits. Most of the world’s polities, however, are not going to make the jump to sustained growth or full democracy. In those places, most of which are poor, despots are too anxious to cling to power. Here, too, the most important task is to pick the right leaders to support. First, Washington should ask not whether local elites are committed to democratic values but whether they can maintain effective security within their borders. The United States should support these leaders with security assistance. Local elites might also accept help from Washington that would result in improvements in public services, especially health care, because better public health might mean more popular support. Finally, rulers in despotic regimes might accept assistance in boosting economic growth, provided that such growth does not threaten their own hold on power.
The question is how to provide such assistance. Outside actors have difficulty suggesting reforms because they have their own interests and only limited knowledge of local conditions. A more realistic approach that can achieve good enough governance would start with a series of practical questions. For example, U.S. policymakers should be asking if the government of Egyptian President Abdel Fattah el-Sisi is inclusive and competent enough to establish stability, not whether the general came to power through a coup. If the answer is yes, then the United States should support Egypt’s security forces, help strengthen the regime’s provision of public health services, and open U.S. markets to at least some Egyptian exports.
Similar considerations should guide U.S. policy elsewhere. For example, Washington should be asking if there are local leaders in Afghanistan and Iraq who could provide stability, regardless of their past sins or how they might have come to power. The United States should acknowledge that there is little it can do to alter the political systems in China and Russia, despotic states with strong central governments. Humanitarian aid is a good thing, but the United States should give it because it helps individuals and not because it will lead to good government.
Washington can succeed only if its policies align with the interests of local rulers; in most cases, those rulers will be despots. Tolerating them and even cooperating with them may be anathema to many Americans. But the alternatives—hubristically trying to remake the world in the image of the United States or pretending that Washington can simply ignore leaders it dislikes—would be even worse.