What makes countries (or anything else) work?

The bit they don’t want to talk about...

This week is one of those rare moments in the geopolitical calendar when the top headline in practically every serious newspaper throughout the world is on the same topic.   You may therefore be expecting that this week’s blog will comment on the election of the 47^th President of the United States.   In fact, I’m continuing (more or less) oblivious, though if you’re interested in my thoughts, with a focus on how the UK should react, you can find them here.

One of the benefits of diplomatic experience is that you see different countries in action and can over time begin to draw your own conclusions about what makes them work, or not.   Despite huge differences of history, geography, culture and just good (or bad) luck, you can try to pick out themes.    And you can also see whether any of those themes hold good in the world beyond geopolitics.   At the very least, you learn early on that not everyone thinks like us and, even when what they’re doing looks odd, they’re not always wrong.  

More disconcertingly, sometimes when you spot them “behaving badly”, you’re forced to accept that we might not be much better.   In Greece in the early 2010s, we diplomats were following the sovereign debt crisis and the efforts of Greece’s creditors to impose structural reforms in exchange for bailouts and a form of debt relief.   A small group of Ambassadors would meet informally every fortnight to compare notes on recent developments.   We’d go through the latest questionable practice which the creditors had highlighted, for example laws prohibiting an entrepreneur from opening a certain kind of shop too close to an existing one in case it created too much competition.   And, I have to confess, we’d sometimes come close to smirking at the sheer absurdity of it all.   Until … almost every time, at least one of us would start to look a bit sheepish as we recognised that the same “crazy” regulation applied in our own country.   One of my sheepish moments came when we got on to taxi regulation.  Now you might think taxi regulation is a good thing, but that’s not the point. Rather, looking at how others do it should prompt us to hold up a mirror to ourselves.

I emphasise that the comparative approach I’m talking about is practical, not theoretical.   When I would talk to international relations students about careers in diplomacy, I would always say that the two activities are very different.  There’s a Venn diagram-like intersection, of course, but most of the theory in an international relations course (as far as I know: I haven’t done one) has only the most indirect bearing on the day-to-day business of diplomacy, even when you’re negotiating international treaties and certainly when you’re looking after distressed citizens or helping your country’s businesses do a deal.    

To be fair, this last observation is itself a rather British way of looking at things.   In the UK, we are still to a significant (and I’d say happy) extent generalists: in the Foreign Office you’ll find graduates in all disciplines, though probably rather more International Relations Masters than in my day.   When I entered the (then) FCO, we had two weeks of induction, more focused on the day-to-day mechanics than grand strategy.  The young German diplomat who joined our course had already spent two years in his country’s Diplomatic Academy before being let anywhere near the Ministry.   His French colleagues went through a different system – usually the famous Grandes Ecoles – but with a similar degree of specialist intensity.   When I found myself in Paris a few months later, I recall asking a senior colleague slightly precociously how British diplomats could possibly compete with our learned French counterparts.   Slightly (and rightly) irritated, he observed dryly that I’d find that he and his colleagues could manage quite well.

The question I want to ask today is simply what makes things work well.   Put deliberately in a colloquial way – rather than, say, talking about political systems or governance – I hope the answer might be of use beyond politics or diplomacy.

My answer is, in one word, accountability.   When you have it, things stand a chance of working well, or at least gradually improving.  When you don’t, it’s hard.   This practical (perhaps amateur) answer is similar to but different from the one in the highly-recommended Why Nations Fail by recent Nobel laureates Daron Acemoglu and James A Robinson’s.   They talk about institutions; I’m focusing on a small component of the bigger picture.

My first encounter with accountability, or the desire to avoid it, was a few weeks after that Foreign Office induction course.   And it was an eye-opener.   One of my first tasks as a junior diplomat was to draft answers to Parliamentary Questions (PQs), asked of the Government by backbench MPs.   With no detailed knowledge of my new responsibilities, I’d go and do a little research and then draft a short paragraph by way of what I thought was a fair answer to the question.   I wasn’t surprised to have these drafts corrected, but I quickly discovered that the true purpose of the answer in most cases was to say as little as possible while sounding authoritative.    Accountability, especially trying to avoid it, is a time-consuming business.    To be fair, you can’t always give away your most profound thoughts, but this looked like something different: a desire to keep prying eyes as far away as possible.

Accountability is much easier called for than achieved.  Someone has to see your homework and mark it.   They need enough information and technical ability to be able to see whether it’s done well and that you haven’t been cheating.   They should obviously be independent, not only in the sense that they shouldn’t be too close to you or beholden to you in some way, but – and here’s the really tough part – their expertise shouldn’t blind them to the wider interest beyond their own specialisation.   Some issues (auditing a large company’s accounts, for example) are so complicated that only an expert in the same profession could possibly understand enough of the homework to be able to mark it.   It goes without saying that that they should be at arm’s length from the organisation they are holding to account.   But how do they go about this?  With sympathy for their fellow professional, or an implacable urge to serve the wider interest?   A thin line, perhaps, but one which in practice makes a big difference.

What matters then is the substance of accountability as much as the form of institutions.   Two countries might have very similar and technically very complex laws in a particular area, say corporation tax: in some cases, the Government of a (let’s say, developing) country might very proudly say that it’s used exactly the same legal framework as another (let’s say, developed) country.   But in one case the law may be used fairly to deliver the stated outcome, in the other the complexity may be consciously used by the authorities to trip up its opponents by making it almost impossible for them to comply.

In the late1990s, Slobodan Milosevic variously held the position of President of Yugoslavia (at that stage the rump Federal Republic of Yugoslavia consisting of Serbia and Montenegro) and subsequently, after his term had expired, President of Serbia.   I recall a learned paper speculating on the constitutional possibilities his change of role opened up: would it constrain his power in some way?   My view was that constitutional niceties didn’t change the reality: he could have assumed the role of Head of the Belgrade Fire Station and would have retained all his de facto power, certainly without much accountability.

Here's the uncomfortable bit.   Accountability is vital, even when we’re not talking about convicted war criminals or other undesirables.   But it’s not made easy.   All things being equal, no one will go out of their way to make themselves more accountable.   That’s too cynical, you might say.   Most people are trying to do a good job.    I’d agree that most people, most of the time, start out trying to do a good job.  They go into their profession, even politics (yes, even politics), with good intentions.   But when you are established, and part of the system, paying your mortgage, you have a lot to protect.   Often, it’s not about money, but reputation.   You take decisions, some of them big.  Some don’t work.   But to protect your institution’s (and your own) “credibility”, you press on.   There’s what we might call a “moral sunk cost”.   And then, the last thing you want is someone breathing down your neck asking difficult questions.   Just look at the huge investment (successive) British Governments make in the teams within Whitehall that prepare the case for Public Inquiries.   There’s an awful lot to defend from all that accountability.

I’m sure all this does sound cynical.   But I’m not actually saying that it’s bad behaviour as much as natural behaviour.   And if we accept that it’s natural behaviour, we have a better chance of putting in place the accountability which means that fewer bad decisions are taken and that we learn from them when they are.

Even if we don’t really like accountability, we do want to be trusted.   I recall an Indian colleague once observing that in a low trust society, being trustworthy in business brings real comparative advantage.   If you live in a country where it’s hard to trust that the milk you buy is safe to drink, a company which has a proven reputation for safe milk is at a definite advantage.   The flip side of this is that if, in an ostensibly trustworthy society we try to skip accountability, that trust can soon be lost.

The lesson – whether we’re studying governments, businesses or other institutions - is to look for where power really sits, to whom it is accountable and how effective the accountability is.   This applies equally to businesses and other organisations as to governments.   Is someone watching?   Do they have the technical skills to mark the homework?   And where do their sympathies lie?

This week, I’ve tried to explain why accountability is a good indicator of whether a system, any system, is working and durable.   There’s a danger that we are finding today that, with ever greater technical complexity, it’s become all too easy to obfuscate and avoid real accountability.   But it shows.   And when people feel that those (“professionals” or “experts”) who take the decisions over their lives are shirking accountability, they look for alternative solutions.    There’s something they can do about that if they want to.

So perhaps we have, after all, returned to the big news story of the week.