Mining for democracy - or not

In my print column this week, "Unbalanced by a Wealth of Oil and Diamonds," I posited that natural resources are the curse of the not-yet-democratic parts of the world. Specifically, I argued that commodities corrupt these countries - instead of developing new forms of wealth such as intellectual capital, citizens or subjects spend all their time competing, often bloodily, for that more visible prize: control of the diamond mine or oil field. This is the case especially where there are no private property rights. Once property rights and democracy are in place, and the commodity prize is in private hands, it becomes a force for overall prosperity and good.

But many places are not there yet.

My subject here was, obviously, current events. But the underlying question is: what circumstances allow democracy to develop, and what circumstances retard democracy's rise? In a valuable draft paper presented the same month the allied forces launched their war in Afghanistan, Montana State University's Robert K. Fleck and F. Andrew Hanssen looked at the same problem as it obtained some 2,700 years ago in Athens and Sparta.

The Athens/Sparta case is a beautifully simple one. Athens and Sparta were similar in many ways. Both, originally, had disenfranchised subjects. Both were led by alliances of war chiefs (sounds like the Middle East). Yet Athens developed into the original democracy; Sparta did not. Why? The authors' answer, as one would expect from two ag-school teachers, relates to commodities. In these ancient economies, agriculture was central. But different sorts of agriculture. Around Athens, food production involved collecting olives and grapes from vines on rocky hillsides. Sparta by contrast boasted fertile plains of wheat, easier and quicker to harvest. In both places the subjects were soldiers.

In Athens' case, write the authors, this meant that workers had to "make substantial long term investments" cultivating vines in obscure rocky crevices, in ways "that would have been very costly for distant landlords to monitor." Sparta's bounteous plains required less personal investment from workers; what's more, crucially, work was easy for Sparta's military elite to watch over.

The result was that if Athens wanted a reasonably well-fed and well-defended society, it had to make workers' investment worthwhile by giving them free rein and ownership. It had to allow the development of democracy. Vine cultivators' ownership of their land was eventually guaranteed by their right to vote.

Sparta's masters were in a different situation. They could get their grain without freeing their helots. They therefore had no incentive to liberate those serfs.

In other words, the sort of natural resources and geography that exist in a territory help to determine whether the people who live there have a chance of becoming free and democratic: "particular countries become democratic" - or don't - "because the leaders rationally expect that democracy will make their countries wealthier."

But what about the commodity that dogs the Middle East, oil? "Our work might suggest that with a resource like oil there is relatively little incentive to expand democratic rights", Mr Hanssen told us this week. "In a certain sense, the Saudis are similar to the Spartans in that they have little to gain by expanding political rights."

Marching in and privatising Saudi, Kuwaiti, Iranian and other oil fields is probably beyond the scope of the vision of even the hawks of the US defence department. (Even countries far closer to democracy have trouble privatising their commodities. Russia's struggles over Gazprom are a prime example.) The best answer here, therefore, is to push for democracy in these countries, and the development of other forms of wealth.

* * * *

I've received negative and positive e-mail from both left and right on this topic. One of the most useful bits came from Oxfam, whose political scientist, Michael Ross, studied the correlation between heavy dependence on oil and mineral exports on the one hand and poverty indicators on the other. Oxfam found that oil- and mineral-exporting countries have worse records on child mortality rates, child malnutrition and other poverty-related indicators than do other countries. I don't agree with Oxfam's general line that wealth exploits. But Mr Ross's material also reveals the damage of state-controlled wealth.

© Copyright 2001 Financial Times

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