Tuesday, November 12, 2013

Health as an indicator of good governance

As I wrote about 2 days ago, I have been thinking a lot about health and governance, and specifically, health as an indicator of good governance. What is governance and what is good governance? Much like porn, you know it when you see it (and I would suggest recent behavior on the part of our own Congress is not it.) It is hard to define good governance or even measure it, although we spend gazillions of dollars around the globe trying to assist other nations develop good governance practices (policies). And, frankly, through our efforts, we sometimes fail to assist because we interrupt the natural development with heavy handed resourcing and skew the efforts of the government. I saw that in Afghanistan first hand -- donors were competing to have their agendas met, paying off high ranking Afghan officials (topping off their salaries) in order to ensure they would have a seat at the table. In any case, governance and economics and social orders are all intertwined, and this is clearly articulated in a paper and book (although, admittedly I have not read the book yet), by Douglass C. North, John Joseph Wallis, and Barry Weingast, called "Violence and Social Orders." What I like about their argument is that economic systems and political systems develop together within a social context and violence is part of that construct -- only in a few countries have the political systems been able to push away violence enough so that the economic and political systems can flourish. Here is what they say:
We show how, beginning 10,000 years ago, limited access social orders developed that were able to control violence, provide order, and allow greater production through specialization and exchange. Limited access orders provide order by using the political system to limit economic entry to create rents, and then using the rents to stabilize the political system and limit violence. We call this type of political economy arrangement a natural state. It appears to be the natural way that human societies are organized, even in most of the contemporary world. In contrast, a handful of developed societies have developed open access social orders. In these societies, open access and entry into economic and political organizations sustains economic and political competition. Social order is sustained by competition rather than rent-creation. The key to understanding modern social development is understanding the transition from limited to open access social orders, which only a handful of countries have managed since WWII.
Access to the paper may be had here: http://www.nber.org/papers/w12795 I like this argument because it makes sense. More thoughts on this to follow.

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