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Democracy on a knife-edge

Democracy on a knife-edge

By Dani Rodrik

Cambridge – In Mohammed Hanif’s novel Red Birds, an American bomber pilot crashes his plane in the Arabian desert and is stranded among the locals in a nearby refugee camp. He finds himself talking about thieves with a local shopkeeper. “Our government is the biggest thief,” he explains. “It steals from the living, it steals from the dead.” The shopkeeper replies, “Thank God we don’t have that problem. We just steal from each other.”

This little vignette just about summarizes the key message of Daron Acemoglu and James Robinson’s new book, The Narrow Corridor: States, Societies, and the Fate of Liberty. Acemoglu and Robinson’s thesis is that prospects for freedom and prosperity balance on a knife-edge between state oppression and the lawlessness and violence that society so often inflicts on itself. Give the state too much of an upper hand over society, and you have despotism. Render the state weak vis-à-vis society, and you get anarchy.

As the book’s title signals, there is only a “narrow corridor” between these two dystopias, a slender path that only a few countries, mostly in the industrialized West, have managed to find. Furthermore, getting on the path does not guarantee staying on it. Acemoglu and Robinson emphasize that unless civil society remains vigilant and is able to mobilize against would-be autocrats, authoritarian regress always remains a possibility.

Acemoglu and Robinson’s new book builds on their previous blockbuster, Why Nations Fail. In that book and other writings, they identified what they call “inclusive institutions” as the principal driver of economic and political progress. These institutions, such as secure property rights and the rule of law, are accessible to all (or most) citizens and do not favor a narrow group of elites over the rest of society.

One country that has always given the Acemoglu-Robinson thesis some trouble is China. The Communist Party of China’s monopoly of political power, the country’s rampant corruption, and the ease with which the Party’s economic competitors and political opponents can be dispossessed hardly smack of inclusive institutions. Yet it is undeniable that over the last four decades the Chinese regime has achieved unprecedented rates of economic growth and the most impressive reduction in poverty in recorded history.

In Why Nations Fail, Acemoglu and Robinson argued that Chinese economic growth will run out of steam unless extractive political institutions give way to inclusive institutions. They double down on this thesis in The Narrow Corridor. They characterize China as a country where a strong state has dominated society for almost two and a half millennia. Having spent so much time outside the corridor, they argue, it is unlikely that China can make a smooth entry back in. Neither political reform nor continued rapid economic growth seems likely.

The other large country that now seems to sit ill at ease with the original Acemoglu-Robinson thesis is the United States. At the time Why Nations Fail was written, many still considered the US a prime example of inclusive institutions – a country that got rich and became democratic through the development of secure property rights and the rule of law. Today, the income distribution of the US is as skewed as in any plutocracy. And the country’s representative political institutions, under attack from a demagogue, look decidedly brittle.

The Narrow Corridor seems to be written in part to provide an account of the apparent fragility of liberal democracies. The authors coin the term “Red Queen Effect” to denote the ever-continuing struggle to uphold open political institutions. Like the character in the Lewis Carroll book, civil society has to run ever faster to keep up with authoritarian leaders and restrain their despotic tendencies.

The ability of civil society to stand up to “Leviathan” may in turn depend on social divisions and their evolution. Democracy typically emerges from the rise of popular groups that can challenge the power of the elites or from splits among elites. In the nineteenth and twentieth centuries, industrialization, world wars, and de-colonization led to the mobilization of such groups. Ruling elites acceded to their opponents’ demands that the franchise be extended, without property qualifications, (usually) to all males. In return, the newly enfranchised groups accepted limits on their ability to expropriate property holders. In short, voting rights were exchanged for property rights.

But, as I discuss in joint work with Sharun Mukand, liberal democracy requires more: rights that protect minorities (what we may call civil rights). The defining characteristic of the political settlement that generates democracy is that it excludes the main beneficiary of civil rights – minorities – from the bargaining table. These minorities have neither resources (like the elite) nor numbers (like the majority) behind them. The political settlement thus favors an impoverished kind of democracy – what one might call electoral democracy – over liberal democracy.

This helps explain why liberal democracy is such a rare beast. The failure to protect minority rights is a readily understood consequence of the political logic behind the emergence of democracy. What requires explanation is not the relative rarity of liberal democracy, but its existence. The surprise is not that few democracies are liberal, but that there are any liberal democracies at all.

This is hardly a comforting conclusion at a time when liberal democracy seems very much under threat, even in those parts of the world where it seems to have been permanently entrenched. But by appreciating the fragility of liberal democracy, we can perhaps avoid the lassitude induced by taking it for granted.


Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.


Copyright: Project Syndicate, 2019.
www.project-syndicate.org


 

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Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.