Category Archives: Europe
In his landmark study of the civic traditions of Italy, Robert Putnam showed how differences in the norms and patterns of behavior that drove societies in northern and southern Italy had profound influence on development outcomes, governance, innovation, and the prospects for democracy. As he explained,
Some regions of Italy, we discover, are blessed with vibrant networks and norms of civic engagement, while others are cursed with vertically structured politics, a social life of fragmentation and isolation, and a culture of distrust. These differences in civic life turn out to play a key role in explaining institutional success.
These patterns are deep-seated, and can be traced back as much as a millennium. Governments had come and gone. Economies had evolved tremendously. Lives had changed enormously, especially in the last few decades. But the basic underlying dynamic that drove how people interacted with each other, how officials behaved, and how government acted retained an important essence that had deep influence. Path dependence was hard to break. Why? (more…)
International efforts to help developing countries start with a mental model of how government should be structured. It is based on the most common European model of state building—a model initially developed by France but shared by most countries today. European history did, however, have another model, one that is not well remembered but that may be much more useful for fragile states—the Swiss model. (more…)
In the years since the financial crisis broke upon the high-income countries, the economic performance of the biggest emerging countries has been remarkable. One of the reasons for this success has been the high degree of fiscal and monetary firepower available to boost demand, making up for shortfalls elsewhere.
Although emerging markets as a whole continue to have substantial room to maneuver, this is not universally true. Some governments are in a much better position than others. And there is a real risk that if another economic shock occurs (because of an oil-price jump – perhaps following conflict in the Gulf – or a collapse of the eurozone), those without the wiggle-room to respond will be vulnerable. (more…)
Greece is not a fragile state, but its governance problems share many of the same characteristics. The state’s struggles to enact reforms are an important case study in how politics, corruption, and elite self-interest can triumph over good ideas:
In exchange for the bailout money that Greece needs by March to avoid what could be a catastrophic default, the country’s foreign lenders have demanded radical changes to make the state more efficient and bring in more tax revenue. But . . . good intentions and directives can easily be evaded or sabotaged by the political class, if its members have not signed on. (more…)