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1 1 SECURITIZATION AND INSTITUTIONAL DEVELOPMENT What are the causes of economic development? Increasingly, scholars of political economy answer “institutions” in general and property rights institutions in particular. As Matthew Lange argues, “the protection of property rights is quite possibly the most basic type of social regulation necessary for market production and expansion”(2005, 58). Emphasizing the importance of private property, prominent economists have defined a“good”institution as“a social organization that ensures that a broad cross-section of the society has effective property rights” (Acemoglu, Johnson, and Robinson 2003, 86, emphasis in original). While the notion is not entirely novel, the Peruvian economist Hernando de Soto (2000) has popularized the idea that the transformation of informal into formal property rights provides the key to economic prosperity, precisely because this is what makes property rights “effective.” This understanding of the importance of formality has in recent years been manifested in “rule of law” initiatives by national governments and international development agencies alike. It has also found an institutional home in a High Level Commission for the Legal Empowerment of the Poor, launched in 2006 and co-chaired by former U.S. Secretary of State Madeleine K. Albright and Hernando de Soto. That formal property rights institutions matter—perhaps particularly for the poor—is a powerful idea.1 But what are the political and historical origins of such institutions? It is this question that this book addresses. The degree to which states are exposed to international competition is an important part of explanations for the emergence of more efficient property rights structures enforced by the state. As Douglass North has noted, “Relatively 2 CHAPTER 1 inefficient property rights threaten the survival of a state in the context of more efficient neighbors, and the ruler faces the choice of extinction or of modifying the fundamental ownership structure to enable the society to reduce transaction costs and raise the rate of growth” (1981, 29).2 While the intuitions behind this line of argument were developed in the context of Europe’s historical experience—with its strong links between warmaking , state-building, and commerce (Tilly 1990)—East and Southeast Asia offer a more recent example of how an intensely competitive regional security environment can motivate state elites to create strong states and pursue economic growth-enhancing and welfare-promoting policies (Stubbs 1999, 2005; Zhu 2000;Kang 1995,2002,29–40;Acemoglu and Robinson 2006;Doner,Ritchie, and Slater 2005; Campos and Root 1996; Woo-Cumings 1998). In other parts of the world, less developmentally positive logics of state formation have prevailed, not necessarily because there has been an absence of war or threats thereof. For postcolonial Africa, respect for the sovereignty norm is often identified as an important explanation for the survival of weak and developmentally ineffective states (Jackson and Rosberg 1982; Jackson 1990). In a more competitive geopolitical context, such states would have been swallowed up by stronger rivals (Herbst 1990).But this Darwinian logic does not necessarily apply even in regions that,like East and SoutheastAsia,have seen intense and persistent geopolitical rivalries. Although postindependence Middle Eastern states have focused great energies on preparing for and engaging in war, the developmental impact of such efforts has been limited, mainly because extractive efforts have been directed toward “external” sources of revenues, whether in the form of natural resource rents (oil) or foreign military assistance from wealthy allies (Heydemann 2000; Lustick 1997; Barnett 1992). Wars do not necessarily make states, even if geopolitics “influence the probabilities of changes in property rights”(Campbell and Lindberg 1990,644). The apparently indeterminate effects of external security threats on state formation have generally been addressed by making the models more elaborate: by adding explanatory variables that specify the conditions under which states will be induced to build state capacity (Doner, Ritchie, and Slater 2005; Thies 2004). In doing so, much of the literature that emphasizes the role of external and internal security threats in accounting for economic and political outcomes of various kinds treats threats as if they were “objective” and state responses as if they were the only “rational” ones given the circumstances. I take a different approach. Most threats to security are not self-evident, and neither are the policies and institutions that will counter them most effectively and efficiently (Widmaier,Blyth,and Seabrooke 2007).State elites are susceptible to misperception,myopia,myth-making,and hysteria (Jervis 1976; Mueller 2005; Van Evera 2003; Snyder 1991, 31–55). Uncertainty and indeterminacy is also a [18.117...

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