What could Soviet Union have learnt from developmental South Korea?

By Camelia Vasilov

Kohli (2004) argues that the pattern of state authority – and particularly the institutionalization of the relationship state-private sector – is crucial in explaining why essentially the same developmental challenge resulted in different outcomes for South Korea, Brazil, India and Nigeria. I think that we can gain useful insight from this theory into the success and failure of the Soviet Union.

Indeed, the efficacy of the government in imposing growth-inducing economic decisions, at the expense of much human suffering, was the key to the miraculous Soviet industrialization and urbanization achieved in only 15 years. But the Soviet system carried the seeds of its own destruction.

As Olson (2000) shows, it wasn’t just the state appropriation of all capital, but rather the peculiar system of taxation that squeezed the maximum worth of people’s work and gave the Soviet Union “more resources for the purposes of leadership that any society in history” (p.120).

Soviet taxation was nearly total on regular working hours, as only the state was entitled to the benefits of people’s work, whose wages were kept below subsistence level. However, there was no taxation on working extra hours – Stakanovist practices were actually monetarily rewarded – or engaging in little trades on the side, unrecognized by the state, as long as one was not caught. Basically, people had to work outside the planned economy as well if they wanted to survive.

But eventually these tiny markets that emerged within the cracks of totalitarian power became essential for fixing the mistakes of planned economy – and the state lost more and more transactional information and thus control over the emerging entrepreneurs.

Wouldn’t it have better if the SSSR took these entrepreneurs under its wings and aligning its goals with them? An agent with the same preferences as the principal is no longer a problem. In South Korea - a cohesive-capitalist state in Kohli’s framework – this is exactly the case: the two horses of business and state are pulling in the same direction (p.21). Could the Soviet Union have become a cohesive-capitalist state? Is China undergoing this transition now? 

The Malawian experience

By Casper Gelderblom

In his book about state-directed development, Atul Kohli distinguishes three different state types: cohesive-capitalist states, fragmented multiclass states and neo-patrimonial states. While the relatively strong organizational underpinning of the first two types renders growth-stimulating industrialization possible, neo-patrimonial states’ interventions in their economies have led to “disastrous results,” Kohli claims. Illustrating this argument with the case of Nigeria, he shows that neo-patrimonial regimes’ treatment of resources and companies as their own patrimony keep the country from achieving economic development. Convincing as the Nigerian illustration may be, not all historical evidence supports Kohli’s presentation of neo-patrimonialism as necessarily destructive.

In the first 15 years after independence, the
neo-patrimonial state of Malawi, for example, achieved a rate of economic development which the World Bank at the time lauded as “impressive”. Despite president Banda’s personal ownership of more than half of the shares of an enormous corporation that largely controlled the country’s largest chains of supermarkets and shops, hardware stores, the tobacco industry and its two banks, his neo-patrimonial rule was characterised by truly impressive growth numbers. Between 1964 and 1979, Malawi’ average annual GDP growth rate was 5.9%, the annual increase of real GDP per worker about 3%, the growth of manufactured output averaged 5.6% p.a. in the 1970s and, most telling in relation to industrialization, the share of the manufacturing sector in the country’s GDP increased from 7% in 1964 to 13% in 1980.  

The early post-colonial Malawian experience indicates that neo-patrimonialism is not necessarily destructive - it might even
lead to strong economic performance. This raises interesting questions for political economy scholars: what characteristics of neo-patrimonial states stimulate or hinder economic development? Given the obvious differences between Nigeria and Malawi, does the presence/absence of resources matter for the economic impact of neo-patrimonialism? And what role does regime type play? Whatever the answer to these questions, one thing is certain: the case of Malawi calls for a more differentiated consideration of the nature and impact of neo-patrimonialism than the one Kohli presents.

War as a cause of state formation

By Anique Zwaan

As Herbst mentions, several scholars have addressed the topic of state formation and stressed the effects war has on state formation. Samuel P. Huntington argued: “war was the great stimulus to state building,” and Charles Tilly even stated “war made the state, and the state made war.”  While Herbst mostly focusses on state formation in Africa, he also states briefly mentions that in many cases in Europe, war has indeed been a cause of state formation.

The example that sprung to mind was the case of the formation of the Dutch Republic in 1581. For some historical background: before the Dutch republic was formed, the land that we now call The Netherlands and Belgium was known as the Spanish Netherlands, and was under full control of Philip II of Spain. The Netherlands were being oppressed by the Spanish, and the Roman Catholic faith was being forced upon the country. In 1568, the mainly Calvinist Netherlandish provinces started the Dutch Revolt, thus beginning the Eighty Years’ War. From the beginning, the country was divided (page 547) in two sections: the southern, catholic provinces (the land we now know as Belgium), and the northern, protestant provinces. In 1581, the northern provinces declared independence from the Spanish oppressors, creating the Republic of the Seven United Netherlands. And now, almost 500 years later, the land that once was declared the Republic of the Seven United Netherlands, is currently known as The Netherlands.

This example perfectly illustrates how a war has crucial effects on a country, and the process of state formation. The Spanish Netherlands, that were once separated by and during war, continue to exist as separate countries, many centuries later. The southern provinces as Belgium, and the northern provinces as The Netherlands.

Resource revenues and state formation

By Onno Blom

In “War and State in Africa’ Herbst argues that much of the lack of state formation in Africa can be contributed to lack of warfare in the past. He finds that war allows the state to collect significantly more taxes with greater efficiency and less public resistance, and that war is the only thing that forces governments to do so. The formation of a strong state, with inclusive institutions based upon taxing, will thus only emerge in foresight of warfare. Herbst concludes that because there has never been large scale interstate warfare in Africa, state formation has lagged behind.

Although the mechanisms that Herbst poses might have worked in Europe, they certainly will not act in the same way in most of contemporary Africa. The main reason for this is Africa’s comparative high dependency on natural resources. For example, government revenues are made up of resource exploitation for 90% for Equatorial Guinea, and 80% for Congo, Angola, Nigeria and Chad. Unfortunately, if most revenue comes from resources, governments would likely get their funding for war from those institutions as well: these sectors have large vested interests which the government takes into account. Moreover, a marginal increase in a large sector provides the same benefits as a large increase in a small sector, while an increase in exploitation of natural resources is easier to realize than setting up inclusive institutions based upon taxation, especially for a government with expertise in the first. Thus, after and during the war, only extractive institutions are created and the state continues to be weak: a state reliant upon the power of its resources instead of taxation of its people does not act in the interest of its population, and this creates institutions which slow down development. 

State making: Italy’s struggle

By Lorraine Besnier

The Italian unification, also known as “Risorgimento”, the Resurgence, was the social, political and armed movement that consolidated the different Kingdoms of Italy throughout the 19th century. The exact period of this process is agreed to have started with the Congress of Vienna in 1815, and ended in 1871 with the proclamation of Rome as the capital of Italy.

When applying this study case too Tilly’s design, Italy falls in the category of a state created, and united by war. Indeed, Tilly states that “war made states and States made war”. As a result from a rising ideal of a united Italy, and the creation of groups of rebellion, the Kingdoms of Italy went through not less than three revolutionary wars.

The first step was the revolution of 1848, which merely was a cumulation of uprisings in several Italian cities. Despite the help of independent armies from various areas, the movement was unsuccessful and by 1849, the old regimes were once again in place. Yet, the failure did not break the increasing feeling of unity, and more people joined the trend. The second insurrection led to a unification between Piedmont-Sardinia and Lombardy.

With this successful outcome, the northern part of Italy voted in 1859 to join this Kingdom, and an additional army went marching in the South to rally the different areas. By the end of 1861, only Venetia and Rome were still outside of the unification.

In 1866, following a campaign against Austria, Italy won Venetia, and in 1870, Italy entered Rome, and both the city and Papal States were incorporated to Italy, thus completing the Risorgimento.

As Tilly proved, Italy became a state through war, but as a state, continued to make war - for instance through the first and second world wars. This design is helpful not only to understand international relations nowadays, but also the intra-national relations. Nothing binds people together like a common enemy.

Does war still make states?

By Lisa Staadegaard

‘War makes states’ is a statement that is generally considered to be true among social scientists. Tilly is one of the scholars who outline how war influenced the state making in Europe. He discusses how nation states were formed through violent competition for territory and capital. The idea of the nation state developed and replaced the settlements that were formerly in place. However if we look at contemporary warfare, where states are already in place, does war still makes states?

Tilly describes 3 stages of state making: first some power holders in ‘external’ struggles differentiate between an ‘internal’ and an ‘external’ area where force is used. Secondly this process of defending the ‘internal’ creates ‘internal’ state making. Finally, ‘external’ war making among states strongly determined the form a particular state takes.

With the international formalization of state boundaries the struggle for coercion is currently mainly internal. Countries increasingly experience internal struggles instead of having external ‘enemies’.

Whereas Tilly describes how the internal state making was a centralized process, finance and capital are decreasingly centralised businesses. Privatisation, de-regulation and reduced budget deficits are recent policy preferences that reduce a state’s control over its financial resources. This often results in a state that is fragmented due to a lack of centralized power.

Therefore wars, especially in the contemporary developing world, trigger a further break down of the state. This instead of creating a centralized, strong structure which is comparable to the states in European history. Therefore we can conclude that contemporary wars do not make states anymore as these wars are often internal ones. This internal warfare often supports the unravelling of states, and thus does the exact opposite of state making. 

Extortion or Protection?

By Rens Edwards

Tilly (1985) provides a necessary condition for state making, namely capital accumulation. Without capital, a state cannot afford a standing army. Consequently, without an army, protection of the state itself nor expansion is possible. An essential aspect of capital accumulation for upcoming states was to demand money in exchange for protection. It did not matter to the government whether its people actually wanted protection, the government simply created demand for protection.

When multiple parties exercise violence in an area, the costs of protection increase. Therefore, an important requirement was that a state had a monopoly on violence, or protection would become too costly. This created “protection racketeering”, which meant that “customers” paid a given amount of money for the protection granted by the government. By doing so, the government gained more income which was used to form an army and hence finance war.

In South Africa, protection rackets are still part of everyday life. Protection used to be the responsibility of the state. Nowadays however, South Africa does not have a single body that controls violence. Rather, several private companies and informal protective organizations (mainly criminal groups) exist to provide protection to the people. Most private security companies are legitimate. Some companies however, mostly located in Cape Town, are being operated by infamous underworld figures. Those companies are a threat to society, because they often make use of extortion instead of offering protection. Although the people should be protected from violence, these gangs are a danger to their own society.

In short, protection racketeering in South Africa functions among others as a means for criminal groups to get cash quickly, which instead causes more violence in its bigger cities. These gangs demonstrate how violence can be abused in the absence of a monopoly on violence by the state itself. 

Did a lack of war cause African states to fail?

By Camelia Vasilov

Starting from Tilly’s well-known argument that in Europe “war made the state, and the state made war”, Herbst proposes an insightful thesis in his article on state-making in Africa: that the absence of inter-state war removed one important avenue for successful state formation on the African continent.

I think the state-war-making thesis hides more from the researcher than it reveals. For instance, it allows us to dispense with the local conditions in the pre-colonial times as variables explaining the success of state making or lack thereof. One example in which these conditions can hardly be ignored is the Tiv culture in Nigeria: a flourishing yet completely egalitarian and stateless society before the arrival of the British.

The Tiv people held beliefs that impeded state creation at every point in time before and even during the colonial times. Namely, as the anthropologist Paul Bohannan argued, the Tiv believed that a person capable of making others following his or her orders must be guilty of witchcraft. A very popular religion amongst this population – the Nyambua – was based on selling charms to protect from those who seemed to possess the dark power tsav (which we would maybe call today “leadership”) and on issuing accusations against such people. Tsav did not mean only “power” or “leadership” – a successful tsav was thought to be also a cannibal that gains extra power from eating human corpses.

The spread of Nyambua posed real problems to the British government in 1939, when its adepts started to declare the “local chiefs” put in place by the British as tsav and rebel against them. Further research showed that this religion became popular since time immemorial, when a series of intra-community conflicts caused by men gaining too much power spilled the blood of the Tiv people. Essentially, the deeply held belief of this people – learnt from war times – was that no one should gain too much power. How can one expect a state to arise that would successfully govern the Tiv?