Niall Ferguson, a famous historian, known as much for his knowledge as for his spirited defence of empires and his conservative perspective on social and economic matters, delivered the first BBC Reith lecture this year on June 19. He devoted it to the indispensable role of institutions in state organisation. What intrigued me was his claim that from around 1500, the Western civilisation, “as found in the quarrelsome petty states of Western Eurasia and their colonies of settlement in the New World”, fared so much better than other civilisations because of their unprecedented success in building sound institutions, and therefore, became far richer than “Resterners”. He went on to say that “one reason the institutional argument is so compelling is that it also seems to offer a good explanation for the failure of so many non-Western countries, until recently, to achieve sustained economic growth”.
There is much truth in Ferguson’s claim. Nevertheless, in its imperial sweep, his conversation ignored a number of factors highly relevant to the process that began in 1500. His is a reductive approach, especially to other great civilisations such as Indian, Chinese, Persian and the Ottoman.
A cursory reference to acknowledged authorities on institution-building shows that its definitions vary considerably and include several shades and nuances. A leading authority, North, defines institutions as “formal and informal rules [or norms] governing human behaviour”. Lin and Nugent (1995) speak of “a set of humanly devised behavioural rules that govern and shape the interaction of human beings, in part by helping them to form expectations of what other people do”.
Pre-Islamic Indians traded far and wide; so did the Chinese. The advent of Islam in the Indian sub-continent brought a more aggressive sea-faring mercantile community, comprising Arabs and Iranians. Trade flourished and produced great prosperity. The Ottomans cast even a wider net. These successes must have required a degree of institutionalisation, trust at home and abroad when nothing like a modern banking system existed and security of private property in the big capitals, if not always on the caravan routes.
Ferguson simply glossed over the shattering impact of western colonialism on the historical structures, including institutions, of the once great civilisations and states, now under assault. As a historian, he would know, and non-imperialist historians attest to it, that colonial officials, whether of the East India Company or of European Crowns and Republics, showed uncanny ability in destroying “native” institutions to establish their highly extractive administration.
One cannot but enter the above caveats to restore proper contextualisation. Ferguson is right about the widening gap between the West and the Rest as time marched on, even as he is selective in listing the causes. Admittedly, non-Western cultures have taken too long to develop democratic institutions and, more importantly, democracy’s quintessential virtues. Far too often, this exercise was taken in conditions of great instability left behind by rapid decolonisation after the Second World War. Most countries of the “Rest” refined their institutions like banks and stock exchanges created on western models and enacted laws mirroring those in the West, but these institutions and laws still do not function with the same probity and efficacy. The historical context of the last 300 years provides an explanation of many of the failures, though not an alibi.
Take the world of Muslim-majority and Arab states that face great turmoil today. A younger generation is out to dismantle even the existing institutions consolidated after the Second World War because they are accused of having served the interests of the metropolitan powers better than the Arab people and also because they are riddled with corruption, clandestinely encouraged by the erstwhile colonial masters.
In his perceptive new study, The Arab Awakening, Tariq Ramadan, whom I have met only once at a conference at The Hague, observes: “The uprisings ... had a clear idea of what they no longer wanted, but struggled to give expression to their social and political aspirations beyond the slogans that called from an end to corruption and cronyism and the establishment of the rule of law and democracy.”
Pakistan has not had a mass uprising, but there is rage beneath the surface, demanding the same kind of leadership for the future that Ramadan thinks is required, following the Arab uprisings. In the Arab lands and in states like Pakistan, this leadership will have to come up with institutions that are modern and yet rooted in local realities. It is not an easy task. It is inhibited by several factors enumerated in the Arab Human Development Reports and similar studies on Pakistan, which incidentally has a larger framework of institutions and laws, however dented they look today. What the Supreme Court of Pakistan is trying to say proactively at the moment is that institutions upholding the Constitution, rule of law and for fighting endemic corruption have to be strengthened, and not weakened further, because of political expediency. There is no disagreement anywhere in the Arab-Muslim world on the need to create strong institutions in which democracy and a new and more just social and economic order could take root.
Tanvir Ahmad Khan is a former foreign secretary of Pakistan and Pakistan’s ambassador to several states.
