Resumed lecture of Professor Paul Collier, Oxford University From Anarchy to a Centralised State
A centralised state or the monopoly of violence emerged from an initial state of anarchy. As in traditional society production and violence are the two types of economic activities whereas armies is the manifestation result of the scale economies of violence. As armies grow bigger more revenue is needed to sustain them and to make a stronger polity. The trade between farmers from different lands needs proper infrastructure. So that, the way to bridge the problem is the application of tax systems. With a tax system in place, there is an incentive for the leader to grow the economy. One way to grow the economy is to encourage trade. However, trade requires people to trust each other, which led to the concept of contract enforcement as a state function, and a provided the base for a rudimentary rule of law. The parliament creation emerged from a shared power. If a leader needs more resource, one possible way is to borrow from the wealthty elite. However, the elite are not likely to trust the leader to pay them back. Thus, at that stage the leader needs to share some of the power with the wealthy elite and give them control over key decisions such as the budget. However, the process of anarchy to a centralised state did not always happen due to some factors such as population density, land productivity, tax systems implementation, ecological variation and colonialism. From Centralised to Inclusive States Inclusive refers to one where ordinary people benefit. The route to an inclusive states divided into minor route and major route. In minor route the size of elite per size of population is compared to security of elite. Security of the elite versus their size of relative to the population decided the growth and the redistribution of the inclusive state. The sharing power is also the factor to leads an inclusive state through minor route. Meanwhile, major route gave the pressure from below. This is a common action of mass rebellion to a massive revolution to change the regime. The major route compares the benefit of protest to the costs, the costs does not always related to material, but also the loved ones. The number of protests must rolling up where all the protests must benefit. Nevertheless, some states do not become inclusive because repression is too successful and there is a high payoff for redistributive state. Power, Identities and Narratives The idea, attitude and behavior of society also give a contribution to greater productivity that leads to economic growth. Each individual will learn from a particular social network, leading to the creation of social norms. Thus, people get self esteem by internalising and complying with the norms of their network to build personal value and act in accordance with the expectations of the group. Identity therefore ‘packages’ the concepts of group narratives, social norms and personal values, and looked at real-world examples of behaviour being influenced by pernicious narratives. There is an intersection between the structures of power and those of identity, and concluded that it becomes exceedingly difficult for power to turn into actual authority if there is a mismatch between power and identity. As with power, identity exists in society on three levels: the national, sub-national and supra-national. If there is a misalignment of power and identity across these three levels, then it becomes very difficult for power to turn into authority. Narratives would be crucial to any process of correcting such a misalignment - just as narratives are vital to the development of socially productive behaviours. Organisational cultures also depend on narratives and deep-rooted patterns of expected behaviour. As such, organisational culture can be extremely slow and difficult to change, even when change is acknowledged to be necessary. Growth through Urbanisation and Industrialisation To increased productivity and to move out of poverty economics of scale and specialisation are the two key factor to achieve higher productivity. These two factors play out spatially in the process of urbanisation and sectorally in the process of industrialisation. The urbanisation study revealed the essential importance of density and transport as the two dimensions of connectivity where city authorities and their public policies play the key roles in the urbanisation process. City with good and high connectivity related to the linking between workers and firm, thence firms to other firms, and firms to their customers resulting more productivtiy. However, insufficient household investment in housing, insufficient public investment in infrastructure, and the absence of land markets are some of the challenges that can prevent cities from developing high connectivity. Thus, taxing land could provide the necessary revenues for cities to invest in public infrastructure. Industrialisation is a slow process due to the challenges a country might face. The interdependency, as well as the challenge of attracting pioneer investments for instance. Specifically, the realities facing small isolated economies, and proposed that to rise out of poverty they need to federate or integrate into the global markets. However, the process of integrating into the global market is impacted by financial, political, and cultural constraints. External Influences: Trade, Capital and Labor Flow For poor society external influences can either help or hinder their development. As international trade can be a way for poor country to use comparative advantage to industrialise and enter the global market place and touched on international policies. Further, the exploration of natural resource has the potential to catapult poor societies into exponential growth but are also majorly problematic, and if not managed correctly, can lead to massive unrest at a national level. Therefore, the role of both good leaders and domestic policy in natural resource revenue management is vital for this. Public and private capital flows are also take a serious role in the development. Along with capital flow, aid has evolved from simply providing capital to poor societies, through the conditionals phase, to the building of stronger institutions to help influence better political decision-making. Potential areas where aid can be useful include: supporting urbanisation, connecting countries to the global economy, incentivising pioneer investors, and subsidising generation of public data. Lastly, labour flows on poor societies could leave a skills gap and a lack of compensation in contrast to those which bring benefits to both the worker and the poor society in the form of new skills and improved attitudes and social networks. Another issue is a forced migration, that is a worldwide problem and needs to be treated as it does not only bring economics impact but also social impact. Hence, policies on migration and refugees need to change to focus on generating jobs instead of only providing food and shelter.
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