The World Bank has just published its annual World Development Report, something it has been doing for more than three decades. [Disclosure: this economist has been contributing comments to early drafts of the WDR for the past 20 years.] The new volume is about security and development. It says that societies are constantly under internal and external “stresses”—think corruption, youth unemployment, racial discrimination, religious competition, foreign invasion, and international terrorism.
Those stresses can become violent conflicts if we lack the “institutions” to manage them. A typical institution is an independent judiciary, an elected parliament, or a police force. When those are bad or bent, not only are people more likely to go at each other, they are also more likely to go at each other over and over again—conflict becomes a repetitive trap.
So the big question is not just how to stop violence, but how to avoid its recurrence. Finding an answer is urgent, not least because the cost of conflict is huge—on average, it sets an economy back 30 years and sends a fifth of its population into poverty. Add to that the loss of life, the psychological trauma, and the lasting social rancor. Sad, isn’t it? Well, one in four human beings currently lives in a violent place.
The report proposes a rather predictable solution to break the cycle of violence: we need better institutions. This is as true for, say, Cote d’Ivoire today as it was for Europe after World War II. But, what does it actually mean for people? In practice, what are the “institutions” that matter to each of us?
Take the case of the 80-year-old grandmother who stepped out of her church in a working-class neighborhood. Two teenagers came up to her, pulled her purse out of her hands, tore off her necklace, knocked her to the ground, and ran away. She stood up and, trembling, walked home. It never crossed her mind to report the assault to the police—she knew better. Question: in the eyes of this lady, which institution failed? Who neglected to protect her community, educate her attackers, and inspire her trust in justice?
Now, scale the case up. A gang of drug traffickers enters a disco at a border city during a birthday party, shoots dead everyone inside, and leave. A warlord sends 12-year-old soldiers to massacre an entire village that happens to live close to a diamond mine. A president is unseated by popular vote but refuses to accept the election’s outcome, unleashing a wave of terror on his opponents. A charismatic university professor convinces poor peasants that their poverty will go away if they just eliminate anyone that is not poor like them. In all these cases, institutions failed the victims of violence—the state, the market, the army, the education system, the media, the international community, none of them did what they were supposed to.
Which brings us back to the World Development Report. It says that we can build institutions good enough and legitimate enough not just to prevent violent conflict, but also to avoid falling back into it. It suggests some quick wins—things like firing crooked officials, publishing the budget, scrapping discriminatory laws, and dismantling secret police forces. It also points out some long-term reforms: build a fair judiciary, let local communities administer schools, prioritize job creation among the young, and so on. But behind all these proposals there is a common element: institutions are good and legitimate only if people can trust them. And the only way to create trust is through results.
In the eye of the common citizen, the police will be “good” when the streets are safe, the schools will be “good” when children attend, learn and graduate, and the electoral commission will be “good” when it shows independence. Yes, measuring safety, educational achievement or political freedom is technically much more difficult than it sounds. But you get the point: institutions are about confidence, and confidence is about performance. That is the essence of the social contract that makes peace, and thus development, possible.
Africa is a great example of how the social contract between people and institutions can change, and how violence can give way to development. The continent is growing fast, and its future looks promising. Much of the growth is due to good luck—high commodity prices mean more resources to build badly-needed infrastructure and unlock the enormous potential of the region’s economy. But much is due to better institutions and, more specifically, to better mechanisms to hold institutions accountable for results. Look at Ghana: its Parliament recently passed legislation giving civil society a direct-view balcony on how oil and gas contracts and revenues will be managed. Others are doing the same. Respect to them.