By Saddam Hussein*
One of the abysmal features of the human state of affairs is that violence has played an integral part in creating social order of any society, since ever. Francis Fukuyama, an American political scientist, political economist, and writer, studies the undercurrents of violence. Fukuyama remarks that unluckily, there is no authentic historical record of the early transitions from group to tribe, or from tribe to pristine state, and one can merely speculate about the dynamics stirring them.
The transitions obviously depended on technological change and economic incentives. While these were also facilitated by capital endowment, the factors by themselves do not seem to be sufficient. Because ancient societies too, like we observe today, were often institutionally rigid in production methods and social organization. Thus, archeological record and its interpretation proposes that it was primarily military competition that brought about transitions.
It was solitary, the threat of violence that generated solid demands for formulating new rules of the game. Therefore new institutions to guarantee the groups’ survival emerged. In this milieu, we can categorize all of human history into three kinds of social orders. The first was Foraging Order, which represents the characteristics of small social groups of early hunter-gatherer societies. Other two major social orders ascended over the preceding ten millennia.
Douglass North, an American economist known for his work in economic history, classified them as Limited Access Order (LAO) and Open Access Order (OAO). Limited Access Order or natural state, is a type of setting in which the political system manipulates the economic system. In simpler words, LAO limits political or economic opportunities to the privileged class only. Elite groups deliberately restrict entry of a common citizen to avail these economic and political opportunities. This is basically a part of the solution to control violence.
We can classify Limited Access Order, also known as Natural State, into three categories i.e., fragile, basic and mature natural state. Fragile natural state can only support the state machinery for sake of the state only. Basic natural state can back few organizations but within the overall apparatus of the state. Mature natural state can support a wide-ranging organization within or outside the domain of state apparatus. Whereas, OAO does not. hypothetically speaking, restrict political and economic opportunities to any class and is open for everyone.
All societies have to solve the problem of violence, but they do so in different ways. In the way they do so, turns out to be very important for their performance. Thus, the limited access order solves the problem of violence by creating rents. The key here is that political system uses rents in limited access order to put limits on access to form organizations, rights to do a certain business as an effort to endure the order. In contrast, open access order has the provision for all the people or citizens to form organizations. Open access order not only creates and sustains both political and economic competition but also have a rich civil society; so, there is an extensive web of different organizations.
Therefore, we need to understand that every society has a specific context and distinct structures. It engineers such public policies that generate rents and privileges which principally solve the problem of violence in society and provide stability.
Most often we miss this point and that is why exogenous endeavors to create a rule of law, market reforms and democracy go unsuccessful because they fail to take into consideration the very logic of a natural state. Transplanting the institutions from developed countries into developing countries cannot yield political and economic development on its own.
Undeniably, if these institutions are enforced involuntarily onto societies by international or domestic gravity but do not follow the prevailing beliefs about the political, cultural, social and economic systems within a particular society, then novel institutions will probably work worse than the ones displaced.
Positive change is a must, but it ought to be subtle and inclusive. When the indigenous systems are overthrown and alien institutions, like free market economy and political competition, imbued; chaos and uncertainty are usually the outcome.
* Saddam Hussein is a Research Economist at PIDE.