TCS Daily

If You Can't Have Bread, At Least Have a Circus

By Peter F. Schaefer - February 13, 2006 12:00 AM

Recently the front page of the Washington Post had a headline which said: "The Realities of Exporting Democracy, A Year after Bush Recast His Foreign Policy, Progress Remains Mixed."

A week later in his State of the Union speech, the President said:

"So the US supports democratic reform across the broader Middle East. Elections are vital, but they are only the beginning. Raising up a democracy requires the rule of law, and protection of minorities, and strong, accountable institutions that last longer than a single vote."

Mr. Bush obviously understands the essential elements of a real democracy, so our problem must be in the execution -- because Muslim terrorists have just been elected in Palestine in a landslide. As a result alarmists all over the world are intoning that democracy has failed. But democracy didn't fail in Palestine. As with capitalism in Latin America, real democracy wasn't tried. Our models failed, our analyses failed, and our assistance programs failed. But democracy didn't fail.

Recent "elections" in the Middle East have given us a mullah who is truly mad, an autocrat getting another term (his fifth or sixth, but who's counting?) and, sadly, in Iraq another government where the Shi'ite clerics will hold the real power.

But our disquiet should not send us back down the road to paternalism or pragmatism -- especially since those tendencies are what got us in trouble in the first place. In October 2003, Newsweek's cover article said:

"[T]he main source of rising unemployment and stagnant economies in the Arab chronic illiquidity...a lack of modern ... financial tools to lure cash out of burgeoning black markets. . . The challenge today is how to revitalize those dormant financial systems and harness the Arab world's huge reservoir of unreported capital."

Today's political problems in the Middle East have their root in economics. Removing these twin roadblocks is a huge challenge.

Should we then return to realpolitik and the notion that nations have interests, not friends? Or should we just let Mr. Carter carry on counting votes and hope things will sort themselves out in time? Unfortunately, voting alone can lead to what Fareed Zakaria calls an "illiberal democracy" - one that fetishizes voting without ensuring true representation.

Mr. Bush must insist that his vision of true democracy be reflected in our aid programs, because having the right idea is not enough. Our strategies to help poor countries become democratic and capitalist have not yet been translated into effective programs. We know this because our tactics have not produced many stable, liberal democracies or capitalist market economies.

Any complex process -- promoting democracy or economic growth for instance -- tends to be chopped up into discrete parts for purposes of management. What then happens is that experts in, say, the process of voting tend to work independently of experts in political party building. Even if someone has the big picture, no one can implement it. So even on a strategic level, vital political and economic components are stove-piped into their distinct bureaucracies.

To draw these parts back together in our planning and implementation, we need to return to first principles. The purpose of government, according to Locke and the Founders, is to "protect life, liberty and property." In fact Locke says, "The great chief end, therefore, of men's uniting into commonwealths, and putting themselves under government, is the preservation of their property." A century later Alexander Hamilton said, "The preservation of property is the primary object of the social compact." The rule of law is the foundation for all modern political economies and essential to the protection of even the most basic rights.

In poor countries the people have already saved trillions of dollars. But they keep every penny of it frozen in property, mainly their homes and businesses. Now, even the World Bank acknowledges the fundamental nature of defending property through law -- because, if there is no supporting web of property and contract laws, titles are meaningless. And if there is no meaningful connection between the people and their elected leaders, a modern nation cannot emerge because elected officials, no matter how well-intentioned, cannot touch the lives of the overwhelming majority of the poor without good law. By itself, voting just ends up swapping one crooked autocrat for another.

This undertaking is crucial to our long-term survival since the so-called "South" has nearly five billion poor people none of whom lives in capitalist democracies. So they are unlikely ever to develop. The history of the last half century of Western "help" is not comforting. There isn't enough money in the West to buy economic development, nor can elections alone sustain a democracy. The North has transferred over $2 trillion dollars to the South and none of the countries at the end of the aid spigot have developed democratic capitalism.

It is true that a few have progressed a bit, but most countries in Africa, for example, have actually experienced declining living standards since independence. A recent UN FAO report says that there are more deaths in Africa from malnutrition now than in the 1990s and one need go no further than looking at elected President Mugabe in Zimbabwe to see why.

If we measure success by equating democracy with voting, and prosperity with money, the logic of our actions compels us to arrange elections and to give poor people those things which mark a modern society; roads and bridges, schools and clinics. But a modern society is not simply the GDP -- it is the institutions of capitalism and democracy. And only good laws can create these institutions. If we want to poor countries to modernize, we have to help them establish the underlying legal structures of modernity.

Of course electoral commissions, safe polling places and other election machinery are critical, but for a true democracy to be "raised up" such isn't nearly enough. What one votes for must be connected to the person's daily life. For aid officials worried about "optics," good legal systems are less visible than the things associated with modernity. Officials can cut a ribbon at a clinic, for example. Elections are normally quite dramatic. Both make good press (especially when President Carter flies in to bless the outcome, as he did in Palestine). But most voters don't care. If voting were all that mattered, Haiti would be a thriving democracy not the hemisphere's perennial basket-case.

This is not to suggest that democracy be put on hold while the country becomes prosperous. Capitalism and democracy can run in parallel. But timing matters. One cannot rush democracy and slow-walk economic reform. Since electoral politics tends to be a game of preserving the status quo, it is important to establish the basic legal and economic system before the political system solidifies. I would even argue, reluctantly, that in Iraq had we rushed real, meaningful economic reforms based on law, and then slow-walked democracy, the country would be a calmer place that was well on the road to real nationhood. People with jobs don't become insurgents, and people with homes and businesses -- protected by government -- don't turn around and attack those self-same interests. A direct connection between voting and economic security, should result in representatives with a mandate to protect individuals' interests, not to provide handouts or accrete power around a faction.

Last summer the Washington Post ran a piece explaining that the current problems of the political leadership in the Philippines were not important to the lives of the poor. But in fact, the entire political process has never been of much concern to poor Filipinos. This is so because a large majority of them don't live or work under the rule of law and so political leaders have no legitimate means to connect to them. The country is, quite literally, ungovernable.

If a poor person in Manila wanted his neighbor's house and killed him to get it, he would face jail because most countries -- democracies and dictatorships -- do a pretty good job of keeping the streets safe. But if he just threw his neighbor out on the street, there is really little that the law could do because most poor Filipinos have no title that proves to authorities that the house is theirs. So many of them hold their property and businesses informally. Thus Filipinos have few options for justice.

After former grade-B actor Josef Estrada was elected president in 1998, the international press was shocked. "Why," they all asked, "would Filipinos elect a crooked, drunken, philandering buffoon as president?" But the honest answer was, "Why not?" If you can't have bread, at least have a circus. The sad truth is that Philippine presidents can do little but entertain, so in 1998 they elected an entertainer. Elections in the Philippines are little more than a chance for poor people to sell their vote for a few bucks.

But when the law protects a person's home and his life, the political equation changes dramatically. Then, those who make and administer the law directly affect the lives of the poorest voters. Elections will actually matter to the people. Only at that point will they tend to select leaders rather than entertainers. Economic opportunity fertilizes the growth of a civil society, which is the only real support for an electoral democracy. Votes alone are bricks along the Yellow Brick Road. Behind the curtain of electoral democracy, we'll find no wizards, only men.

Peter Schaefer was a senior official at the U.S. Agency for International Development during the Reagan and George H.W. Bush administrations.


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