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What a narrow focus on social contracts misses

Seth Kaplan | 02 March 2014

International development organizations often make the social contract and state-society relationship a prominent part of their aid efforts. A case in point was the three-day conference organized by UNDP’s Bureau for Crisis Prevention and Recovery (BCPR) and the Norwegian Peacebuilding Resource Centre (NOREF) just outside New York City in January on ‘Shaping the State through the Social Contract in Situations of Conflict and Fragility.’ The aim of the event was to clarify the principles of the social contract approach, and to better understand how UNDP can put it to use in its operations worldwide.

Focusing international aid efforts on the social contract has many benefits. Among others, it helps ensure that politics plays an important role in policymaking. This has too often not been the case and yet it is the crucial element in statebuilding.

However, a too narrow focus on the social contract has significant drawbacks. In fragile states, which function according to a different set of sociopolitical dynamics from more cohesive and institutionalized countries and have more deep-seated problems as a result, it can distract attention from the need to deal with other issues that don’t easily fit into its top-down state–society framework.

Here are five ways in which those working to develop or enhance social contracts can be more effective.

1) Focus on the horizontal as much as the vertical. Too often, international efforts focus tightly on a narrow view of governance, ignoring the critical factors that truly determine success in fragile and conflict-affected states. A 2012 OECD report on fragile states (Letouzé and Catheu, 2012), for instance, emphasized the importance of the vertical state–society relationship 15 times and the social contract 13 times in 108 pages, but completely ignored factors shaping the horizontal dynamics within society.

As I explain in a recent NOREF report (Kaplan, 2014) on social covenants and social contracts, horizontal society-society dynamics are closely linked to vertical state-society relationships in fragile states and often have an important impact on how these relationships evolve. Thus, they have an immense impact on whether a social contract can be fashioned and, if it eventually is, what its nature will be. In such places, developing a ‘social covenant’ that brings together various ethnic, religious, clan and ideological groups is essential to creating a more inclusive and sustainable political process and social contract.

Although both social covenants and social contracts are important, they serve different purposes. As Jonathan Sacks explains, “Social contract creates a state; social covenant creates a society. Social contract is about power and how it is to be handled within a political framework. Social covenant is about how people live together despite their differences. Social contract is about government. Social covenant is about coexistence. Social contract is about laws and their enforcement. Social covenant is about the values we share. Social contract is about the use of potentially coercive force. Social covenant is about moral commitments, the values we share and the ideals that inspire us to work together for the sake of the common good (Sacks, 2007).”

2) In addition to these two pillars (social covenant and social contract), a related goal is central: the institutionalization of the state (Kaplan, 2013). This is an essential requirement for any country to create a stable, sustainable, open, inclusive regime, and depends, as Samuel Huntington defined almost half a century ago, upon substantial efforts to develop the ‘political organizations and procedures’ (including political parties, the rules guiding the choice of leaders, the rule of law, etc.) within a country. The greater  “the extent to which the political organizations and procedures encompass activity in the society” and are able by their “adaptability, complexity, autonomy, and coherence” to resiliently respond to the ever-growing needs of rapidly evolving societies, the more stable politics will be and the more likely that leaders will be able to focus on working constructively with opponents, developing the economy, and expanding public services.

3) Don’t forget the economy. The more confident people are in the direction of the state in terms of the economy, the more likely they are to view other aspects of the government and leadership in a positive light and to forgive reasonable differences in how well their group or area does vis-à-vis others. In contrast, the more a country struggles economically, as did Syria in the years leading up to its conflict, the more people become pessimistic and likely to see biases against their group as grounds for resentment and action.

Although China is far from democratic, and although corruption and weak rule of law diminish its strength, its government enjoys a high degree of support and legitimacy precisely because it has achieved so much in the economic sphere. Leaders work hard (if not always successfully) to ensure that the country’s rapid growth brings benefits to as many people as possible. This has meant that the poor in China (which included almost the whole population three decades ago) have done better than almost anywhere in the developing world over the past generation. The number of those in poverty has dropped by 650 million (Chen and Ravallion, 2012), infrastructure and education now reach the remotest villages, and rural and backward regions have gained significant investments to boost livelihoods. This focus on economic inclusiveness explains much of China’s success, and is echoed in countries across East Asia, partly explaining why they have outperformed all other regions of the world for decades.

4) Incentives matter. Arguably the biggest impediment to developing inclusive social covenants and contracts is the set of structural disincentives to their promotion (Kaplan, 2013). Leaders – politicians, officials, important business figures, heads of religious and community groups – who want to promote inclusiveness and put the national interest above sectarian or individual needs often have to work against the grain of society to do so. Incentives are more often than not oriented in ways that encourage exclusiveness (and corruption).

Indeed, leaders and officials in fragile states face a political and economic calculus very different from that encountered by their peers in the rich world. The presence of a weak government incapable of enforcing the rule of law and easily co-opted by wealthy and powerful forces creates a difficult environment for progressive-minded individuals, often forcing them to make uncomfortable choices simply to survive politically.

5) Experimentation is crucial. Instead of bringing with you a set formula of how things are supposed to work, try to build upon what is already there through a process of trial and error. This means much experimentation, adjusting to what is learned, and gradual movement forward. Master plans are not likely to work. Set designs for how governments are supposed to be organized or what might provide the most effective leadership for a country are not likely to work as advertised. In this respect, it is important to follow the Deng Xiaoping maxim that has guided China’s reform efforts,  “Cross the river by feeling the stones(摸着石头过河 – Mōzhe shítou guòhé).”

As Yingyi Qian explained in a 2002 paper on how China reformed:

"It is not enough to study the conventional ‘best-practice institutions’ as a desirable goal. One should also study how feasible, imperfect institutions have evolved to complement the initial conditions and to function as stepping stones in the transition toward the goal. Underlying China’s reform is a serial of [incremental] institutional changes concerning the market, firms, and the government in the novel form of ‘transitional institutions’."

Much will depend on the ability of commitment mechanisms to hold major players to account when they backslide. States with weak institutions have few of these, so finding ways to hold people to their word will be essential to ensuring commitments are carried out. In some cases, this means external anchors are necessary in order to ensure internal institutions do their part.

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