Douglass North on Afghanistan

Nobel Laureate Douglass North is not a blogger or an op-ed columnist. But I can guess at his reaction to President Obama's speech last night. The President said,

We'll support Afghan ministries, governors, and local leaders that combat corruption and deliver for the people.

Here is how I think North would look at it. Think of Afghan leader Karzai as like Don Corleone in The Godfather. He controls some enterprises within a territory. Corleone obtains obedience in part because people fear him and in part because of his ability to dispense favors. One of the most important levers of power for Corleone is the fact that key judges and police officers are on his payroll.

Now, our President goes to Corleone with an offer to supply muscle to fight some of Corleone's rivals. But the President says that Corleone has to stop dispensing favors and stop corrupting judges. Of course, if Corleone complies, his power base will unravel.

Corleone operates in what North calls a "limited-access order," in which brute force and personal ties are the main source of order. In contrast, the President operates in a country that is an "open-access order," where property rights and the rule of law tend to dominate.

The change from a limited-access order to an open-access order is like a phase change in chemistry--like going from liquid to gas. Afghanistan is nowhere close to the point of changing from liquid to water vapor. In that metaphor, it's about 2 degrees centigrade in Afghanistan, when the boiling point is 100 degrees, and you need even more energy when you reach that temperature.

Of course, the President may only be paying lip service to the corruption issue. Perhaps his real plan is to deal with Corleone as he is.

North is one of the economists interviewed in Book 1.

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