04/02/2012 05:34 pm ET Updated Jun 02, 2012

Failing States

As I was departing Liberia in mid-2009, after a year and a half of service there as an American officer serving with the United Nations Mission, I caused a bit of a stir in a remark I made to the Liberians: "Now that your main international benefactor has elected a chief executive who, by virtue of the color of his skin, represents 13 percent of the population, when are you going to change your racist constitution and allow all the people to fully participate in the political, social and economic processes here?"

That was not taken very well, as you could imagine.

The Liberian constitution is rather democratic, granting its citizens full rights of suffrage, property ownership, eligibility for political office, service in the police and military, and so on. But there's one catch: Article 27b, which states:

In order to preserve, foster and maintain the positive Liberian culture, values and character, only those who are Negroes or of Negro descent shall qualify by birth or by naturalization to be citizens.

Racism is racism. While some Liberians explained to me that this provision was there to prevent, for example, the Lebanese who run the majority of businesses from gaining disproportionate and unfair influence, I was skeptical because I knew the real reason was to preserve the near-monopoly of power Americo-Liberians (the descendants of slaves), who represent 5 percent of the population, have enjoyed for generations over the indigenous people. This has been a main driver of conflict leading up to the 14-year civil war, one of Africa's most vicious, which brought people like me there to begin with.

Besides, I told them, it was time to move on. If this root cause, among many other complex reasons, is not dealt with, then Liberia will remain the fragile state it is, and the progress and sacrifice seen the past decade or so could all go up in flames with the right spark on the tinderbox. You are either moving forward or moving backward, but never staying still.

In my three decades of nation-building and learning about human security, I've come to the firm conclusion that one of the common causes of failed, failing, and fragile states is when a society is more exclusive than inclusive. I share this opinion with many others in the field, but was rather surprised to see this in William Easterly's book review of Daron Acemoglu and James A. Robinson's new book, Why Nations Fail, in the Wall Street Journal.

The main premise of the book, as with many developers, is that it's institutions that determine the fate of nations. Moreover, national success comes

"when political and economic institutions are 'inclusive' and pluralistic, creating incentives for everyone to invest in the future. Nations fail when institutions are 'extractive,' protecting the political and economic power of only a small elite that takes income from everyone else."

Inclusiveness is characterized by a broad distribution of political power and limits to that power, and above all transparency and accountability in governance. Economically, it encompasses property rights, contract enforcement, ease of starting new companies, competitive markets and freedom for citizens to enter the occupation and the industry of their choice.

"Just as inclusive institutions feed on each other," Easterly continues, "so do their opposites: Extractive political institutions support the economic institutions that protect the interests of the elite against new entry from competitors. The wealth of the elite so created can make the hierarchical, authoritarian state even larger and more repressive, increasing elite wealth even more. This vicious cycle means that bad history persists into bad present outcomes."

I think you know where I'm going here. A few months back, I posited in that "the greatest long-term threat to national (and international) security is more than the deficit. It's also the ever-widening gap between the haves and have-nots and the social inequalities that come with it -- beyond a clash of civilizations, cultures and class, it's generational."

One of the most telling points Easterly makes is that the reason North America had an easier time shaking off its exploitative colonial past was "due to the majority middle class of family farmers that settled it, compared with a minority European elite in South America." Extractive institutions, he points out, also produce more violence as rival elites fight over the reins of power. This helps explain not only the long history of coups (such as the other week in Mali) and civil wars in Africa as well as in Latin America, including the drug wars just south of our border.

As you know, America's middle class as of late has not exactly been doing well.

More food for thought comes from Michael J. Sandel's piece in The Atlantic, in which he observes that "we live in a time when almost everything can be bought and sold," that in the United States in particular, we have moved from a market economy to a market society, where commercial values permeate almost every aspect of our lives.

Why worry about this? In short, for two reasons, the first being inequality and the other corruption. "In a society where everything is for sale, life is harder for those of modest means," Sandel writes. "The more money can buy, the more affluence -- or the lack of it -- matters." I'm thinking right now also of relationship between affluence and influence; namely, in the "super-PACs" that are holding hyperbolic sway over the electoral process, thanks to a monumental Supreme Court decision that makes corporations persons -- and we haven't even reached the general election.

The role of money in politics helps explain the corruption issue, but it's a much broader problem, driven by what Sandel calls "the corrosive tendency of markets": "Putting a price on the good things in life can corrupt them. That's because markets don't only allocate goods; they express and promote certain attitudes toward the good being exchanged." We haven't had a real national discussion about how to value certain societal goods -- such as health, education, family life, nature, art, civic duties and so on -- we simply let the market decide for us, in our post-Cold War economic triumphalism. But, as any follower of the stock market knows, the market is not necessarily a rational actor.

And, in his blog last week, Fareed Zakaria noted: "The statist French, for example, have a tax code of only 1,909 pages -- only 12 percent as long as ours... You have to understand, complexity equals corruption."

Failing states are failing states. The difference between over there and over here, however, is that we have been stacking the deck against ourselves. We can't even think of adopting the (increasingly outmoded) victim mentality of those who have known nothing else but enforced inequalities and exclusive societies. As I said: "If we want responsible governance, we need to provide responsible citizenship."

Whether here or there, a people can fail its state as much as a state can fail its people.