Daron Acemoglu, How can society build inclusive political institutions?

The rise of Brazil since the 1970s was not engineered by economists of international institutions instructing Brazilian policymakers on how to design better policies or avoid market failures. It was not achieved with injections of foreign aid. It was not the natural outcome of modernization. Rather, it was the consequence of diverse groups of people courageously building inclusive institutions. Eventually these led to more inclusive economic institutions. But the Brazilian transformation, like that of England in the seventeenth century, began with the creation of inclusive political institutions. But how can society build inclusive political institutions?

History, as we have seen, is littered with examples of reform movements that succumbed to the iron law of oligarchy and replaced one set of extractive institutions with even more pernicious ones. We have seen that England in 1688, France in 1789, and Japan during the Meiji Restoration of 1868 started the process of forging inclusive political institutions with a political revolution. But such political revolutions generally create much destruction and hardship, and their success is far from certain. The Bolshevik Revolution advertised its aim as replacing the exploitative economic system of tsarist Russia with a more just and efficient one that would bring freedom and prosperity to millions of Russians. Alas, the outcome was the opposite, and much more repressive and extractive institutions replaced those of the government the Bolsheviks overthrew. The experiences in China, Cuba, and Vietnam were similar. Many non-communist, top-down reforms fared no better. Nasser vowed to build a modern egalitarian society in Egypt, but this led only to Hosni Mubarak’s corrupt regime… Robert Mugabe was viewed by many as a freedom fighter ousting Ian Smith’s racist and highly extractive Rhodesian regime. But Zimbabwe’s institutions became no less extractive, and its economic performance has been even worse than before independence.

What is common among the political revolutions that successfully paved the way for more inclusive institutions and the gradual institutional changes in North America, in England in the nineteenth century, and in Botswana after independence—which also led to significant strengthening of inclusive political institutions—is that they succeeded in empowering a fairly broad cross-section of society.

Pluralism, the cornerstone of inclusive political institutions, requires political power to be widely held in society, and starting from extractive institutions that vest power in a narrow elite, this requires a process of empowerment. This, as we emphasized in chapter 7, is what sets apart the Glorious Revolution from the overthrow of one elite by another. In the case of the Glorious Revolution, the roots of pluralism were in the overthrow of James II by a political revolution led by a broad coalition consisting of merchants, industrialists, the gentry, and even many members of the English aristocracy not allied with the Crown. As we have seen, the Glorious Revolution was facilitated by the prior mobilization and empowerment of a broad coalition, and more important, it in turn led to the further empowerment of an even broader segment of society than what came before —even though clearly this segment was much less broad than the entire society, and England would remain far from a true democracy for more than another two hundred years. The factors leading to the emergence of inclusive institutions in the North American colonies were also similar, as we saw in the first chapter. Once again, the path starting in Virginia, Carolina, Maryland, and Massachusetts and leading up to the Declaration of Independence and to the consolidation of inclusive political institutions in the United States was one of empowerment for increasingly broader segments in society.

The French Revolution, too, is an example of empowerment of a broader segment of society, which rose up against the ancien régime in France and managed to pave the way for a more pluralistic political system. But the French Revolution, especially the interlude of the Terror under Robespierre, a repressive and murderous regime, also illustrates how the process of empowerment is not without its pitfalls. Ultimately, however, Robespierre and his Jacobin cadres were cast aside, and the most important inheritance from the French Revolution became not the guillotine but the far-ranging reforms that the revolution implemented in France and other parts of Europe.

There are many parallels between these historical processes of empowerment and what took place in Brazil starting in the 1970s. Though one root of the Workers’ Party is the trade union movement, right from its early days, leaders such as Lula, along with the many intellectuals and opposition politicians who lent their support to the party, sought to make it into a broad coalition. These impulses began to fuse with local social movements all over the country, as the party took over local governments, encouraging civic participation and causing a sort of revolution in governance throughout the country. In Brazil, in contrast with England in the seventeenth century or France at the turn of the eighteenth century, there was no radical revolution igniting the process of transforming political institutions at one fell swoop. But the process of empowerment that started in the factories of São Bernardo was effective in part because it translated into fundamental political change at the national level—for example, the transitioning out of military rule to democracy.

More important, empowerment at the grass-roots level in Brazil ensured that the transition to democracy corresponded to a move toward inclusive political institutions, and thus was a key factor in the emergence of a government committed to the provision of public services, educational expansion, and a truly level playing field. As we have seen, democracy is no guarantee that there will be pluralism. The contrast of the development of pluralistic institutions in Brazil to the Venezuelan experience is telling in this context.

Venezuela also transitioned to democracy after 1958, but this happened without empowerment at the grassroots level and did not create a pluralistic distribution of political power. Instead, corrupt politics, patronage networks, and conflict persisted in Venezuela, and in part as a result, when voters went to the polls, they were even willing to support potential despots such as Hugo Chávez, most likely because they thought he alone could stand up to the established elites of Venezuela. In consequence, Venezuela still languishes under extractive institutions, while Brazil broke the mold.

What can be done to kick-start or perhaps just facilitate the process of empowerment and thus the development of inclusive political institutions? The honest answer of course is that there is no recipe for building such institutions. Naturally there are some obvious factors that would make the process of empowerment more likely to get off the ground. These would include the presence of some degree of centralized order so that social movements challenging existing regimes do not immediately descend into lawlessness; some preexisting political institutions that introduce a modicum of pluralism, such as the traditional political institutions in Botswana, so that broad coalitions can form and endure; and the presence of civil society institutions that can coordinate the demands of the population so that opposition movements can neither be easily crushed by the current elites nor inevitably turn into a vehicle for another group to take control of existing extractive institutions. But many of these factors are historically predetermined and change only slowly. The Brazilian case illustrates how civil society institutions and associated party organizations can be built from the ground up, but this process is slow, and how successful it can be under different circumstances is not well understood.

One other actor, or set of actors, can play a transformative role in the process of empowerment: the media. Empowerment of society at large is difficult to coordinate and maintain without widespread information about whether there are economic and political abuses by those in power. We saw in chapter 11 the role of the media in informing the public and coordinating their demands against forces undermining inclusive institutions in the United States. The media can also play a key role in channeling the empowerment of a broad segment of society into more durable political reforms, again as illustrated in our discussion in chapter 11, particularly in the context of British democratization.

Pamphlets and books informing and galvanizing people played an important role during the Glorious Revolution in England, the French Revolution, and the march toward democracy in nineteenth-century Britain. Similarly, media, particularly new forms based on advances in information and communication technology, such as Web blogs, anonymous chats, Facebook, and Twitter, played a central role in Iranian opposition against Ahmadinejad’s fraudulent election in 2009 and subsequent repression…

Authoritarian regimes are often aware of the importance of a free media, and do their best to fight it. An extreme illustration of this comes from Alberto Fujimori’s rule in Peru. Though originally democratically elected, Fujimori soon set up a dictatorial regime in Peru, mounting a coup while still in office in 1992. Thereafter, though elections continued, Fujimori built a corrupt regime and ruled through repression and bribery. In this he relied heavily on his righthand man, Valdimiro Montesinos, who headed the powerful national intelligence service of Peru.

Montesinos was an organized man, so he kept good records of how much the administration paid different individuals to buy their loyalty, even videotaping many actual acts of bribery. There was a logic to this. Beyond just recordkeeping, this evidence made sure that the accomplices were now on record and would be considered as guilty as Fujimori and Montesinos. After the fall of the regime, these records fell into the hands of journalists and authorities. The amounts are revealing about the value of the media to a dictatorship. A Supreme Court judge was worth between $5,000 and $10,000 a month, and politicians in the same or different parties were paid similar amounts. But when it came to newspapers and TV stations, the sums were in the millions. Fujimori and Montesinos paid $9 million on one occasion and more than $10 million on another to control TV stations. They paid more than $1 million to a mainstream newspaper, and to other newspapers they paid any amount between $3,000 and $8,000 per headline. Fujimori and Montesinos thought that controlling the media was much more important than controlling politicians and judges. One of Montesinos’s henchmen, General Bello, summed this up in one of the videos by stating, “If we do not control the television we do not do anything.”

The current extractive institutions in China are also crucially dependent on Chinese authorities’ control of the media, which, as we have seen, has become frighteningly sophisticated. As a Chinese commentator summarized, “To uphold the leadership of the Party in political reform, three principles must be followed: that the Party controls the armed forces; the Party controls cadres; and the Party controls the news.”

But of course a free media and new communication technologies can help only at the margins, by providing information and coordinating the demands and actions of those vying for more inclusive institutions. Their help will translate into meaningful change only when a broad segment of society mobilizes and organizes in order to effect political change, and does so not for sectarian reasons or to take control of extractive institutions, but to transform extractive institutions into more inclusive ones. Whether such a process will get under way and open the door to further empowerment, and ultimately to durable political reform, will depend, as we have seen in many different instances, on the history of economic and political institutions, on many small differences that matter and on the very contingent path of history.