Editor’s Note: On June 10, AI editorial board chairman Francis Fukuyama shared a panel on “Competitive Eurasia: Space for Trust” at the 11th St. Petersburg International Economic Forum with President Vladimir Putin of Russia and President Nursultan Nazarbayev of Kazakhstan. This article is a slightly edited transcript of his remarks.
I don’t feel it is my job to give advice to anyone here, particularly the presidents who spoke before me, concerning the specifics of political and economic arrangements in this region. Rather, I want to put the discussion in the larger context of broader developments in world politics, and my starting point for this purpose will be Samuel Huntington’s thesis concerning the “clash of civilizations.”
Professor Huntington argued in his 1996 book of that title that, after the Cold War, world politics would be dominated not by conflicts between rival ideologies, but by conflicts between civilizations and cultures. He wrote that the power of culture would trump the integrating forces of globalization, and that people’s loyalties would ultimately be defined communally based on ties of religion, ethnicity and shared history. Huntington characterized the values of the Western Enlightenment, democracy and individual rights prominent among them, as projections of the values of Western Christianity, reasoning that other cultures with other values would create different types of institutions. In Huntington’s schema, incidentally, Russia was relegated to a civilizational space separate from that of western Europe on account of its Orthodox Christian religious traditions.
In the decade since it was published, many have argued that the clash of civilizations hypothesis has been proven right by events. There has been a broad rise in religious energies and identity, particularly notable in the Muslim world with the emergence of radical Islamism, but also evident in South Asia, Latin America, the United States and Russia. Much of the current turmoil in the Middle East is the byproduct of religiously grounded terrorism and American reaction to it after September 11, 2001. Elsewhere too, as in East Asia, old-fashioned nationalism, which is to say ethno-nationalism, is on the rise.
The issues raised by the clash of civilizations thesis are clearly relevant to our topic because they raise a key question: When we think about regional integration, do we set the boundaries of cooperation according to cultural factors, or do we follow the dictates of economic rationality? Are natural political spaces of trust created by culture, or can we integrate on a more global, perhaps even universal, basis?
I both agree and disagree with the “clash of civilizations” thesis. I agree that cultural factors have become the prism through which many people see international affairs today. On the other hand, I believe that this point of view underestimates the integrating forces driving global development, and the way in which the modernization process is forcing a convergence of institutions and approaches to governance on an increasingly worldwide scale.
Huntington is right that culture and political identity based on shared culture are not going to disappear in the foreseeable future. People will remain primarily defined by nation, tradition, culture and local community. Globalization will not produce cultural uniformity throughout the world, nor, in my view, would that be a good thing were it possible. It would be profoundly undemocratic if global economic forces stripped local communities of their ability to decide how to structure their common political life.
It is certainly true, too, that different countries must find their own routes to modernity. The specific paths that western Europe, the United States, Japan, Russia and other countries have taken are all different. Modernization and development arise from the efforts of the people who live in a given society, not from those of outsiders. Countries can learn from one another, but their ability to shape outcomes in foreign lands is usually very limited. This is something that the United States has painfully learned over the past four years in Iraq.
The question we need to address, however, is whether we are taking different paths to the same endpoint—an endpoint of a single world civilization—or whether different human cultures are heading to fundamentally different places. My view, contrary to Professor Huntington’s, is that modernization itself in the long run requires the convergence of many types of institutions, regardless of cultural starting points. And economic integration between states is most productive, and results in the most durable forms of trust, when it is based on transparent, rule-bound institutions rather than the looser ties of cultural affinity.
We can see why this is so among states if we understand better the essential quality of the effective modern state itself. The starting point of any country’s development is the state, which German sociologist Max Weber defined as a monopoly of legitimate force over a defined territory. But while the state begins with coercion, the miracle of the modern state is its ability solve the paradox of power—namely, that a state has to be strong enough to enforce laws and provide order, yet it must constrain its own exercise of power if there is to be long-run economic growth.
Many observers in the West wrongly downplayed the importance of the state in the early post-Cold War period. The trend toward liberalization following the end of communism and the disappearance of the Soviet Union was understandable, given the fact that many states had grown either too strong, too sclerotic, or both—not just in the Soviet Union but in other developed countries, as well. In the process of adjustment, however, some countries cut back critical state functions and capacity too far. Thus throughout many parts of the post-Soviet space, in particular, there was an excessive weakening of state authority.
Indeed, it is state weakness that explains anemic economic growth in many parts of the developing world. All societies need order, rule of law, a government that provides basic public goods, and a reasonably fair distribution of resources. If rulers cannot govern effectively, if they are highly corrupt and divert public resources to private ends, if they behave arbitrarily, then they will undercut the savings and investment needed for long-term growth. It is therefore no surprise that by the end of the 1990s, better governance and more competent states became the order of the day.
How does a modern state achieve good governance? Good governance is not a gift given by rulers to the ruled. It ultimately has to be based on accountability mechanisms which ensure that rulers truly serve the interests of the ruled, not just their own interests or those of their friends and families. It is for this reason that the World Bank for some years now has been emphasizing greater accountability as the key to better governance.
Governments can be held accountable in a number of ways. The most familiar are those vertical accountability mechanisms known as elections. But there are also mechanisms of horizontal accountability that work when different parts of a government, with their own specified responsibilities and functions, monitor each other’s performance. Parliaments and courts, independent of the executive, are of course crucial in this regard. Furthermore, there are mechanisms of vertical accountability outside the formal political system. Accountability requires institutions that provide transparency regarding the behavior of rulers, for bad governments seldom report on their own failures and transgressions. That is why good governance requires an independent media and the institutions of civil society to monitor the performance and behavior of the state.
Thus, effective modern states are as notable for the constraints they put on themselves as they are for their ability to concentrate power. Constraints are necessary in the long run to promote good economic governance and growth, for long-term growth depends on investment, and investment comes about only with stable property rights and a rule-bound environment in which private businesses can operate predictably free of arbitrary state infringement. Finally on this point I would note that governance requirements for resource-rich countries need be much more stringent than for countries lacking natural resources, given the distributional conflicts and opportunities for corruption that resource rents encourage.
I have spoken about national-level institutions on a panel devoted to regional economic issues because trust among nations, or in global business, depends on the nature of the legal and institutional frameworks within which businesses have to operate no less than is the case within states. Whether within or among states, trust can arise from one of two sources. The first is cultural, where trust derives from shared values, traditions and history. In all societies, trust begins with family and kinship, and then slowly radiates out to a broader range of social groups. The second form of trust is based on shared interests. This kind of trust can exist between complete strangers with nothing in common culturally and who may operate in different parts of the world. This kind of trust is based on institutions.
Of the two forms of trust, the cultural version is clearly the most natural and widespread, but it is also more primitive. All human beings organize themselves into primary social groups or cultural communities, and nearly all people fall back on such groups in times of trouble or crisis. The second form of trust expands the potential radius of trust indefinitely. It is more durable because it is based on self-interest, and it is the basis of modern economic interdependence. Trust becomes increasingly anchored in self-interest rather than culture as countries modernize. Globalization provides the opportunity to expand markets far beyond the limits of one’s own cultural community, requiring development of an impersonal, structured institutional framework by which trust can emerge between complete strangers. The whole apparatus of modern law and the mechanisms mandating transparency in corporate and state governance are designed to get around the need for culturally based trust.
A case in point: Businesses in China and in Chinese-speaking societies were traditionally structured around the family. Confucianism is an ideology that puts family relations at the center of morality. This meant that trust in China was often reserved for relatives or close personal friends; it was very difficult to trust strangers or enter into business relationships with someone to whom you were not related.
While this kinship-based form of social capital worked to a degree and for a while, it was limiting. It meant that family-owned businesses could not grow into large, professionally managed companies. Nepotism also engendered corruption and incompetent management, problems that came to light during the Asian financial crisis of a decade ago. So the next stage in East Asia’s economic development was to replace business relationships built around personal ties with ones anchored in formal legal and economic institutions. This is a process that is still proceeding, faster in some East Asian countries than in others, with potentially significant global economic and political implications.
When we ponder what kind of trust will emerge in Eurasia in the years ahead, we face the same basic choices. Trust can be based on cultural affinity and shared history, or on mutual self-interest and institutions. There are many political reasons for countries to decide to align with one another on grounds of cultural, ethnic or historical commonality. But economic rationality demands that trust be based on more impersonal criteria, and here the degree to which a country’s institutions are law-governed and transparent takes pride of place.
The clash of civilization perspective focuses our attention on the retreat in many parts of the world into cultural stereotypes, identity politics and politicized religion. But it diverts our attention away from another dynamic that has continued unabated over the past several hundred years toward the development of modern states that can deploy power, enforce rules and yet constrain themselves at the same time. Globalization may create a backlash against itself as people retreat into closed communities. But it also creates a way out of such dead-ends by opening up new channels of connectedness beyond these identities.
And we are seeing, I believe, the gradual emergence of an international order based on institutions and rules, though this project is in a much less developed state. Integration in the global economy will be more durable and productive of shared prosperity to the extent that it can be based on interests rather than passions, on institutions rather than culture. This is not a Western perspective; it is a global one.