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ReVision, Fall 1999 v22 i2 p27
Economic Justice and National Borders. Thomas W. Pogge.

Full Text: COPYRIGHT 1999 Heldref Publications

Broadly considered, our world seems to be in top economic condition. At U.S $30 trillion, the world product is higher than ever before.(1) And even if inflation and population growth are taken into account, global economic growth has been impressive: Even though population has doubled in the past thirty-nine years, from three to six billion people,(2) the real world product (i.e., the inflation-adjusted sum of all gross domestic products or GDPs) has quadrupled in the same period, so that real per capita world product is now roughly twice what it was in 1960.(3) Looking forward one might add that, following the end of the Cold War, military expenditures have declined from 4.7 percent of world product in 1985 to 2.9 percent in 1996 (HDR 1998, 197)--a decline that currently releases some $550 billion annually for more productive purposes (the so-called peace dividend). Is the world that we shall soon hand over to the generations of the new millennium, now an idyllic paradise in which milk and honey flow freely?

That Panglossian view is disturbed by the fact that a large proportion of humankind is hardly participating in the economic progress and prosperity. Among the poorest, conditions continue to be desperate: 1.3 billion persons, that is 22 percent of the world's population, live below the international poverty line, which means that their daily income has less purchasing power than one dollar had in the United States in 1985: less purchasing power than $1.53 has in the United States today. As a consequence of such severe poverty, 841 million persons (14 percent) are today malnourished; 880 million (15 percent) are without access to health services; one billion (17 percent) are without adequate shelter; 1.3 billion (22 percent) are without access to safe drinking water; two billion (33 percent) are without electricity; and 2.6 billion (43 percent) are without access to sanitation (HDR 1998, 49). As a further consequence of such severe poverty, a quarter of all children between 5 and 14, 250 million in all, are compelled to work, often under cruel conditions in mines, quarries, and factories, as well as in agriculture, construction, prostitution, textile and carpet production.(4) About one-third of all deaths, some 50,000 daily, are due to poverty-related causes such as measles, pneumonia, and diarrhea, and could easily be prevented through adequate nutrition and safe drinking water or cured through cheap rehydration packs and antibiotics.(5) If conditions in the United States resembled those in the developing countries, we would have about 14 million working children under age fifteen and 3,500 poverty-related deaths per day.(6)

Of course, severe poverty is nothing new. What is new is the extent of global inequality. Genuine affluence is no longer reserved to a tiny minority. Hundreds of millions are enjoying a high standard of living, with lots of free time during and after their working years, allowing ample opportunity to enjoy travel, education, cars, household appliances, computers, and so on. Incomes in the top quintile (20 percent) of world population now afford about fifty times as much purchasing power on average as those in the bottom quintile--and they are 220 times higher if the conversion is done in terms of market exchange rates. That last fact means that a mere half of one percent of our income in the top quintile would be more than sufficient to double the income of everyone in the bottom quintile.(7)

Inequalities in wealth are significantly greater than inequalities in income. Well-off persons typically have more net worth than annual income, while the poor typically own less than one annual income. The huge fortunes of the ultrarich have been specially highlighted in the United Nations Development program: Human Development Report (HDR). We are told there that "The three richest people have assets that exceed the combined GDP of the 48 least developed countries," which together have more than 550 million citizens (HDR 1998, 30).(8) "The additional cost of achieving and maintaining universal access to basic education for all, basic health care for all, reproductive health care for all women, adequate food for all, and safe water and sanitation for all is ... less than 4% of the combined wealth of the 225 richest people in the world" (HDR 1998, 30).

How does it come about that there is so much severe poverty in a world that, in aggregate, is rather affluent? I will here present a few reflections on that question. I do so because I believe that it is not taken seriously enough by economists and political scientists (nor, of course, by politicians, the media, and the general public) and that we have so far only a rather incomplete and perhaps even misleading account of the causes of current world poverty.

Conventional accounts represent global inequality among human beings as the product of two different inequalities: the inequality among states and the inequality that exists among citizens within each state. That suggests how world poverty is to be explained, namely, by bad and often unjust economic policies in the poorer countries. Pervasively corrupt, their social institutions and elites hamper domestic economic growth, causing the relative (and sometimes absolute) impoverishment of those countries, and they also block a more equitable distribution of the gross domestic product that could alleviate the burdens of the poorest citizens.

That explanation suggests, in turn, how global poverty might be reduced: "The governments and political institutions of the developing countries ought to be more reasonable, i.e. more responsive to the needs of these countries' populations. Unfortunately, that is a task with respect to which outsiders can help to only a limited extent. The main reasons are, first, that it would be morally unacceptable to impose reasonable governments or social institutions upon such countries, and, second, that any resolute interference in the internal affairs of developing countries could easily be counterproductive, as corrupt elites manage further to entrench their rule by denouncing the supposed colonialism or imperialism of our attempts. However sad it may be, our hands are tied in this matter. We can try to mitigate global poverty through development aid. But even this strategy is not particularly successful, because we are unable to prevent the corrupt elites from diverting a large part of our aid into their own pockets.(9) Yes, half a percent of our income would be enough to double the incomes of those in the lowest quintile, but there is unfortunately no way of getting such a donation to the world's poorest persons in a concentrated way."(10)

That popular analysis of world poverty is quite correct in many of its assertions. The eradication of poverty in the developing countries indeed depends significantly on the governments and social institutions in those countries--in particular on how the economy of each is structured and whether there exists genuine competition for political office that gives politicians an incentive to be responsive to the interests of the poor majority. It is easy to show empirically that differences in political and economic systems go much farther in explaining poverty in the various developing countries than do differences in their natural endowments (raw materials, soil, and climate, etc.). One can see this in an exemplary way by comparing resource-poor Japan and the "Asian tigers"--South Korea, Hong Kong, Singapore, and Taiwan--with resource-rich countries such as Indonesia, Nigeria, and Burma, or by comparing the China of the 1960s and 1970s with that of the 1980s and 1990s.

That popular analysis of world poverty is nevertheless ultimately unsatisfactory because it presents the corrupt social institutions and corrupt elites prevalent in the developing countries as an exogenous fact: as a fact that explains, but does not itself stand in need of explanation. "Some developing countries succeed in giving themselves a reasonable form of government, but many others fail or do not even try to do so--that is just the way things are." An explanation that stops here does not explain very much.

An adequate explanation of world poverty must not merely adduce the prevalence of corrupt social institutions and corrupt and oppressive elites in the developing countries but must also provide an explanation for that prevalence. To understand the persistence of massive and severe poverty, we need an explanation for the high incidence of oppressive and corrupt governments that are unresponsive to the needs and interests of "their" populations. Explanations offered in that vein generally point to the culture and/or history of particular countries. A cultural explanation might assert, for example, that corruption and dictatorship are endemic to the culture of certain countries and are widely accepted by the population as a familiar feature of their way of life.(11) A historical explanation may, for instance, trace back Cambodia's lack of progress during the last thirty years to the fact that the country was dragged into the Vietnam War and its population victimized first by a pro-American military dictatorship and a civil war, and then, after the U.S. withdrawal, by the crazy communist nationalism of the Khmer Rouge. Likewise, one might explain the frequency of corrupt elites in Africa by reference to the fact that national borders there were drawn during the colonial period without regard for tribal and linguistic boundaries.(12) That has led to ethnically and linguistically heterogeneous states whose internal communities feel a lot of distrust and very little solidarity with one another. Consequently many African politicians are supported only by members of their own linguistic or ethnic community. Because they must then rely on that community to gain or maintain political power, they are beholden to it and obliged to unfairly favor it in their exercise of power, which in turn reinforces mutual resentment and distrust among ethnic and linguistic communities.

Cultural and historical explanations of this sort are not always correct. That is especially true of cultural explanations, from which one can often learn more about the prejudices of their proponents than about the countries in question. Indonesia, for instance, has long been a favorite example of a baksheesh culture--but only among those who were blind to the hatred and contempt ordinary Indonesians had felt for their ruling elite until those feelings finally burst forth in the last twenty months.

Historical explanations, insofar as they are true, usefully complement and relativize the conventional analysis that holds that responsibility for world poverty lies with the poor countries themselves.(13) But they also conveniently localize the rich industrialized countries' contributions to world poverty in the past--pegging them to a time when the United States was still making war in South East Asia or when the European states still had colonies in Africa. Such explanations therefore do not upset the popular opinion that we now can do very little to mitigate the problem.

That popular opinion is undermined when our explanation of oppression and poverty takes account of present global factors. I do not have in mind here merely (what one might call) negative factors, such as the absence of initiatives through which the rich countries could promote greater democratic responsiveness and economic justice. But I want to highlight systemic aspects of the prevailing global economic and political order that actively favor the perpetuation of poverty and corruption.

I will focus on what I take to be the most significant example of such systemic problems:(14) Any group controlling a preponderance of the means of coercion within a country is internationally recognized as the legitimate government of that country's territory and people--regardless of how that group came to power, how it exercises power, or the extent to which it may be supported or opposed by the population. That such a group exercising effective power receives international recognition means not merely that we are prepared to negotiate with it; it means also that we acknowledge the group's right to act on behalf of the people it rules and that we, most significantly, confer upon it the privileges to dispose freely of the natural resources of the country (international resource privilege) and to borrow in the country's name (international borrowing privilege).

The resource privilege we confer upon a group in power is much more than our mere acquiescence in its effective control over the natural resources of the country in question. That privilege includes the power(15) to effect legally valid transfers of property rights in such resources. Thus a corporation that has purchased resources from the Saudi or Suharto families or from Mobuto or Sani Abacha thereby becomes entitled to be--and actually is--recognized anywhere in the world as the legitimate owner of those resources. That is a remarkable feature of our global order: A group that overpowers the guards and takes control of a museum may be able to give some of the artwork to others, accepting money in exchange. But the fence whom they are doing business with becomes merely the possessor, not the owner, of the artwork through such a transaction. Contrast that with a group that overpowers an elected government and takes control of a country. Such a group, too, can give away some of the country's natural resources, accepting money in exchange. In that case, however, the purchaser acquires not merely possession but all the rights and liberties of ownership, which are supposed to be--and actually are--protected and enforced by all other states' courts and police forces. The international resource privilege, then, is the power to confer globally valid ownership rights in the country's resources.

What can consideration of this resource privilege contribute to the explanation of undemocratic and corrupt forms of regime in the developing countries? I think it can contribute quite a lot. The international resource privilege enables many despots to obtain funds from abroad and thereby keep themselves in power without popular support. In Nigeria, for example, the value of Nigeria's oil exports has averaged about $20 million per day, roughly one-quarter of that country's gross domestic product. Whoever controls that revenue stream can afford enough weapons and soldiers to keep himself in power regardless of what the population may think about him.(16) And as long as he succeeds in doing so, his purse will continuously be replenished with new funds through which he can cement his rule and finance a luxurious life style.

In resource-rich developing countries, the international resource privilege provides a strong incentive toward the undemocratic acquisition and unresponsive exercise of political power. It should therefore not be surprising that there is a weak negative correlation between developing countries' resource endowments and their rates of economic growth:(17) The better-endowed countries are more likely to experience coup attempts and civil wars and more likely also to be ruled by corrupt elites, so that despite all their natural wealth poverty in those countries tends to decline very slowly, if at all.(18)

Nigeria again affords a good example. During twenty-eight of the past thirty-two years, Nigeria has been ruled by a succession of military strongmen who took power and ruled by force. It is considered the second-most-corrupt country on the face of the earth (freshly overtaken by Cameroon). Despite huge revenues from resource sales, Nigeria's real per capita GDP has actually declined by over 20 percent since 1977 (HDR 1998, 145). Africa offers many further examples of the same trend, including Angola, Mozambique, Kenya, and Congo/Zaire (under Mobutu). In addition one might mention Venezuela and Brazil in South America; the oil states of the Middle East (Saudi Arabia's real per capital GDP is now less than half what it was in 1980); the Philippines under Marcos, Burma/ Myanmar and so on.(19) Indonesia does not exemplify the postulated trend quite as well. The last forty years (dominated by Suharto) did bring a significant increase in real per capita GDP, but the widely reported reduction of poverty --from 70 million poor in 1970 to 22.6 million in 1996--actually exists only on paper. In order to maintain cordial relations with Suharto, the World Bank, from 1989 on, simply publicized the poverty figures Suharto asked it to publicize. That is now asserted by former vice minister of planning Mubyarto and confirmed by Jeffrey Winters, who was then working in Jakarta for USAID and is now a professor at Northwestern University (the latter said that the Indonesian poverty numbers were "pulled completely out of thin air").(20)

Although any satisfactory explanation of oppression, corruption, and poverty in the developing countries must make reference to local factors--and especially to each country's particular history, culture, and endowment with raw materials--current global factors, such as the international resource privilege, are also important because they strongly influence how those local factors evolve and play out. Without the international resource privilege, a developing country's generous resource endowment would not handicap its progress toward democratic government, economic growth, and the eradication of poverty.

Such current global factors are easily overlooked (as is the role of oxygen in the outbreak of a fire). It is admittedly quite convenient for affluent people to be able to acquire ownership of resources from corrupt tyrants and ruling elites, but we could (and certainly should) get by without that option. In any case, it is certainly feasible to abolish or reform the international resource privilege, as I will discuss below in more detail.

Before I do so, however, I will say a little about the international borrowing privilege, which permits a group that exercises effective power within a national territory to borrow funds in the name of the whole country. That borrowing privilege contains the power to impose internationally valid legal obligations on the country at large. Any successor government that refuses to honor debts incurred by an ever so destructive (corrupt, brutal, undemocratic, unconstitutional, repressive, or unpopular) predecessor regime will be severely punished by the banks and governments of other countries. At minimum it will lose its own borrowing privilege and be excluded from the international financial markets. Such refusals are therefore quite rare. Governments, even when newly elected after a dramatic break with the past, cannot avoid paying the debts of their ever-so-awful predecessors.

The international borrowing privilege exacerbates corruption and poverty in the developing countries in three important ways. First, it facilitates borrowing by destructive governments, thus helping such governments to maintain themselves in power even against near-universal popular discontent and opposition. Second, the international borrowing privilege imposes upon democratic successor regimes the (often quite large) debts of their corrupt predecessors, thereby sapping the capacity to implement institutional reforms and other political programs and rendering them less successful and less stable than they would otherwise be. Third, the international borrowing privilege further strengthens the incentive for coup attempts: Whoever succeeds in bringing a preponderance of the means of coercion under his control gets the borrowing privilege as an additional reward.(21)

What I have tried to substantiate here is a point not of morality, but of causality. One can also present such a point negatively, as a critique of the conventional wisdom, or rather ideology: Observing much political oppression and severe poverty in the developing countries, and noting that those evils are not evenly distributed among them, experts and laypersons alike are drawn to explanations invoking national factors and international differences in such domestic factors (history, culture, climate, natural environment, leadership personalities, etc.). But such local explanations are incomplete in two important respects.

First, an explanation of national human rights problems in terms of domestic factors does not explain why those domestic factors exist in the first place. It is quite possible that global factors significantly affect national institutions and policies, especially in the poorer and weaker countries, and that in a different global environment domestic factors that tend to generate oppression and poverty would occur much less frequently or not at all.

Second, local explanations can show at best how in the prevailing global context specific domestic factors are causally connected with national human rights fulfillment. Such explanations leave wide open the possibility that, in a different global environment, the same domestic factors, or the same international differences, would have quite a different impact. The fallacy looming here is analogous to a now well-understood fallacy that used to be common in the old nature versus nurture controversies: Even if genetic differences are by far the most important factor in explaining interpersonal differences in vulnerability to a certain disease, it may still be true that the overall incidence of that disease could be dramatically reduced through a change in the environment (after which reduction the genetic difference would have much less impact). Even if over 90 percent of the observed variation in female adult height (54-60 inches) in some village is due to hereditary factors (there being a very high correlation between a woman's height and the average height of her two parents), it is still quite possible that all woman villagers would be much taller (63-70 inches) if, when they were growing up, the village had had an adequate food supply or girls had not been disadvantaged vis-a-vis boys. My reasoning is analogous to this well-rehearsed argument, with domestic factors corresponding to genes/nature and global factors corresponding to environment/ nurture.

Those two reflections show how global factors can be of crucial importance for understanding the overall incidence of oppression and poverty and how they can be important even for understanding differences between countries. But I have tried to substantiate here a stronger, positive conclusion. My claim has been not merely that global factors can be of great importance, but that they are of great importance for understanding real-world oppression and poverty. I have not merely complained that certain deeper explanatory questions are conventionally left unexplored, but I have also outlined at least a partial answer to those questions by arguing that any complete explanation of the global incidence of oppression and poverty must prominently include the international resource and borrowing privileges as well as the further elements of international recognition that groups can count on if only they manage to seize effective power within a national territory. These global factors contribute to explaining oppression and poverty in four main ways: They crucially affect what sorts of persons shape national policy in the developing countries, what incentives these persons face, what options they have, and what impact the implementation of any of their options would have on domestic poverty and human rights fulfillment.

Once the point about causation has been appreciated, its relevance for our moral understanding of the world is not hard to see: We blame oppression and poverty in so many developing countries on the social institutions and elites of those countries. In that assessment we are correct: If those social institutions and elites were more reasonable, oppression and poverty would rapidly decline. We conclude from that that oppression and poverty in the developing countries cannot be blamed upon external (foreign or global) factors. But such a judgment, encouraged perhaps by faulty additive conceptions of causality and responsibility, is in error: There is every reason to believe that feasible reforms of certain external factors, such as the international borrowing and resource privileges, could bring about a rapid decline of oppression and poverty. In fact, such reforms afford a more realistic strategy for moral progress: Attempts to encourage more reasonable elites and social institutions in the developing countries are unlikely to have any lasting effect as long as the international environment in which such elites operate provides the objective incentives it is now providing.

To be sure, calling on the more powerful and affluent states to reform the global economic order by, in particular, abolishing the international resource privilege may not be so realistic either. Though it is a root cause of widespread oppression and poverty in the developing countries, it is also very much in the interest of affluent countries and understandably very dear to their rulers. It guarantees us a reliable and steady supply of resources because we can acquire such ownership rights from anyone who happens to exercise effective power, without regard to whether the country's population either approves the sale or benefits from the proceeds. It also greatly reduces the price we pay for those resources because no supplier is excluded for lack of democratic authorization, and corrupt supplier governments, made more numerous by the international resource privilege, tend to want to maximize sales in the short term to serve their own personal interests. Supplier governments committed to serving the needs of a country's present and future people would be more inclined to budget its resources for maximum long-term benefit.(22)

We should remember the previous discussion when we hear the popular argument that natural resources are not (any longer) a significant part of the global economy. Once we understand why that is true (e.g., in terms of a percentage of the dollar value of world product or of aggregate international trade), we also understand why it is, in a deeper sense, false. Natural resources are of little significance only given current price vestors; which are themselves heavily influenced by the international resource privilege and by the extreme global income inequality it helps cause.(23) The true significance of natural resources is in their use value for all human beings, present and future. By that standard, they are grossly undervalued at current market prices. That undervaluation reflects a negative externality that the corrupt elites of resource-rich developing countries and the consumers of resources together manage to impose upon the populations of those developing countries as well as on future generations (for whom such resources will be considerably less plentiful and more expensive).

How can such an imposition be justified? On what moral grounds can we--a small global elite of affluent citizens in rich countries and ruling elites in resource-rich developing countries--base our enforcement of a global property regime under which we may claim the world's natural resources for ourselves and distribute them among ourselves on mutually agreeable terms? Those who like to debate the morality of international redistribution might suitably ponder that question.

Those who process and consume such resources in the developed countries will be quick to point out that our purchases from oppressive regimes in the developing countries constitute fair exchanges at current market prices. But how can an ever-so-free and fair agreement between an oil company and a military strongman create property rights in vast quantities of crude oil, thereby dispossessing the local population and the rest of humankind? Is there a moral difference between paying such a strongman and stealing the oil outright? In fact, paying corrupt and oppressive elites inflicts a second undue harm upon the poverty-stricken populations: Not only are their resources taken away for our consumption (and much environmental damage done) without their consent, but their hated rulers are also propped up with funds that they can spend on arms and soldiers to cement their rule.

If we are, as I have argued, beneficiaries of an unjust global economic order, then we ought to work collectively to reform it, and we ought to work individually to mitigate its worst effects. Most of the donations raised by so-called charities such as UNICEF or Oxfam are in fact most fittingly viewed as meeting the second of those duties: restitution or re-redistribution. However, I will conclude with some recommendations regarding the first duty--institutional reform. Reflecting on feasible reforms is of great moral significance, of course. But it is crucial also for gauging the true importance of the global factors I have highlighted. Their explanatory importance might be challenged as follows: Granted, governments in (especially the resource-rich) developing countries will not be genuinely democratic or responsive to the interests of their people as long as current global institutions, and the international resource and borrowing privileges in particular, persist. But it might be argued that those global rules of the game are unimportant because, like the oxygen content of the Earth's atmosphere, the rules are immutable or somehow essential for the organization of human life. Alternatively, your reference to those global rules may be of very limited importance, because any reasonable and practical modification of the rules would not produce significant change. To respond to that challenge, we must reflect upon possible alternatives, which I will introduce briefly.

One obvious alternative is that the international resource and borrowing privileges be assigned only to democratically legitimated governments. Governments not fulfilling that condition would not be entitled to effect internationally valid transfers of ownership rights in their country's natural resources or to impose internationally valid repayment obligations upon their successors.

Such a modification of the prevailing rules of the game would evidently have to be worked out in far greater detail to permit assessment of its impact on the problems of oppression, corruption, and poverty. First, it must be asked how internationally authoritative decisions about the democratic legitimacy of a particular government are to be made and by what criteria. Such decisions might be made by an international commission of jurists, affiliated with the United Nations, which should also have at its disposal specially trained personnel for the observation and (in special cases) implementation of elections. That commission should, as far as possible, apply the particular rules of democratic legitimation that each country has imposed upon itself.(24) By incorporating such rules into written constitutions (which should also lay down precisely how such rules may be amended), democratic governments would ensure that the commission would make its decision pursuant to standards approved in advance by the country's own population. The work of the commission thus would also help stabilize that country's democratic institutions. It should nevertheless be possible, in special cases, for governments that came to power by force to legitimate themselves through a newly designed democratic procedures accepted by the commission as satisfying internationally recognized principles of democratic governance.

Second, it is important to ensure that the modified borrowing privilege will not have a destabilizing influence on existing democratic governments. Such an influence might come about as follows: If an officially illegitimate government cannot, in any case, borrow abroad in the name of the entire country, it may see no reason to service debts incurred by its democratic predecessors. That fact might make borrowing abroad more difficult for democratic governments perceived to be in danger of being overthrown--which would not, of course, be in the spirit of my proposal.(25) That difficulty could be neutralized through an international loan insurance fund that temporarily services the debts of democratically legitimate governments whenever illegitimate successors refuse to do so. Such a fund, like the commission proposed above, should be financed jointly by all democratic states. That would require some states, the enduringly stable democracies, to contribute to a fund from which they would hardly ever profit directly. Ideally, financial contributions from those countries would be small because the overthrow of democratic regimes would be much less frequent. Such contributions would also be well justified because of the global beefits of democratization--greater respect for human rights and fewer wars.(26)

Third, one has to accommodate the fact that the natural resources located within an illegitimately governed country may belong to private (domestic or foreign, individual, or corporate) owners. Revenues from the sale of such resources are generally divided: One part goes to the government (as taxes and other fees) and the remainder goes to the private owners. The modified rules should, in such cases, be sensitive to three considerations: (a) the origin of the property right in question and, in particular, to whether that right was acquired at a time when the country was governed democratically; (b) the proportions in which the revenues are being divided and, in particular, how much of these revenues would be diverted to the undemocratic government now in power; (c) the degree of illegitimacy of the present government, which depends also on how well it is protecting human rights as well as the levels of repression, corruption, and poverty.

The last consideration suggests that the modified rules might produce optimal incentives when they are coupled with graduated sanctions--perhaps in this way: A government without democratic legitimation lacks authority to act on behalf of the people and is therefore not entitled to the borrowing privilege and not entitled to confer ownership rights in the state's resources. Whether and to what extent it is allowed to profit from resource sales by private owners depends on how repressive it is and the extent to which it tends to use state funds for public purposes. These remarks are, of course, for illustration only. Working out the details would require considerable expertise in economics, history, political science, and international law.

NOTES

(1.) This figure, equivalent to $30 million million, is extrapolated from that for 1995, which was $27.846 trillion (HDR 1998, 83). Most data in this report, which I will cite as HDR, are obtained from the World Bank.

(2.) Extrapolating from the figures in HDR, page 177, this figure will be reached late in the year 2000. The world population in 1960 is reported at 2.994 billion (HDR 1997, 195).

(3.) Figures about the development of real (1987 dollars) per capita GDP for all countries and groups of countries are provided in HDR pages 140-143. Growth has averaged about 1.7 percent annually in the industrialized countries (1.9 percent for the U.S.) and 1.6 percent in the world at large. In the 48 countries now listed as "least developed," however, average real per capita GDP has actually fallen slightly.

(4.) The International Labor Organization at http//www.ilo.org/public/english/270asie/ feature/child.htm states: "At least 120 million children between the ages of 5 and 14 work full time. The number is 250 million, or more than twice as many, if we include those lot whom work is a secondary activity."

(5.) For more information on poverty-related deaths, see United Nations Children's Fund (1998).

(6.) This subjunctive counterfactually holds constant the demographic composition of the United States, in particular: its number of children under 15 and its annual death rate.

(7.) My intent here is to convey a sense of the extent of global inequality--not to suggest that such a transfer is economically feasible.

(8.) I assume that "assets" means net worth. The 48 least developed countries are listed on page 226 of HDR. The more populous among them are Afghanistan, Angola, Bangladesh, Cambodia, Ethiopia, Mozambique, Nepal, Somalia, Sudan, Tanzania, Uganda, and Yemen.

(9.) See economics literature on the substitution effect (development aid is spent on socially necessary programs, thus freeing up ordinary government revenues for embezzlement) and the macro-micro paradox (governmental and nongovernmental development aid makes a difference for its local target but fails to improve conditions in the beneficiary country as a whole).

(10.) This passage is not a quote. I have put it in quotes to alert even sleepy readers to the fact that this is not a view I endorse, but one 1 will revise and complement.

(11.) Here is one notorious example: "... it is not the sign for some collective derangement or radical incapacity for a political community to produce an authoritarian regime. Indeed, the history, culture, and religion of the community may be such that authoritarian regimes come, as it were, naturally, reflecting a widely shared world view or way of life" (Walzer 1980).

(12.) This point could be extended to ex colonies elsewhere, most notably perhaps, Indonesia.

(13.) This is how it is often put--albeit misleadingly, for assigning responsibility to a developing country as a whole conceals the fact that the policies of such countries are typically determined by corrupt "elites," which are neither chosen by, nor responsive to, the population.

(14.) Other aspects, though less significant, are considerably more obvious. One such obvious aspect is the diplomatic immunity --currently invoked by General Augusto Pinochet--which shields crimes committed in an official capacity from prosecution in other countries. Another such obvious aspect is the fact that, until this year, most developed countries have not merely considered it perfectly legal for their firms to bribe foreign officials but have even allowed these firms to deduct such bribes from their taxable revenues. (The U.S. pioneered reform with its 1977 Foreign Corrupt Practices Act after the Lockheed Corporation was found to have paid not a modest sum to an LDC official, but rather a $2,000,000 bribe to Prime Minister Kakuei Tanaka of powerful and democratically-governed Japan. It took another 22 years for other countries to follow suit with an international agreement outlawing such bribes, which has now been drafted and signed by thirty-four countries according to The Wall Street Journal on 16 February 1999 (A18). Obviously, bribes encouraged by such rules make a significant difference in determining which interests officials in developing countries are beholden to and also significantly affect what kinds of persons are motivated to scramble for public office.

(15.) A "power" in this sense (Hohfeld 1919) involves the recognized authority to alter the distribution of first-order liberty rights, claim rights, and duties. Having a power or powers in this sense is distinct from having power (i.e., control over physical force and/or means of coercion).

(16.) For some background, see "Going on down," in The Economist on 8 June 1996. A later update says: "oil revenues [are] paid directly to the government at the highest level.... The head of state has supreme power and control of all the cash. He depends on nobody and nothing but oil. Patronage and corruption spread downwards from the top" (The Economist 1998).

(17.) See "Dictatorships as a Political Dutch Disease," (Lam and Wantchekon 1999). The empirical part of this paper specifically supports the hypothesis that the causal connection between resource wealth and poor economic growth (the so-called "Dutch disease") is mediated through reduced chances for democracy: "All petrostates or resource-dependent countries in Africa fail to initiate meaningful political reforms.... On the other hand, besides South Africa, transition to democracy has been successful only in resource-poor countries" (31). The authors summarize their findings as follows: "In this paper, we investigate why resource abundance generates dictatorial political regimes, which in turn exacerbates the poor economic performance due to Dutch disease. We argue that the negative impact of a resource boom on democratic regimes is caused by its effect on the distributive influence of the elite. Our cross-country regression confirms our theoretical insights. We find that a one percentage increase in the size of the natural resource sector generates a decrease by half a percentage point in the probability of survival of democratic regimes.... [I]n order to improve economic performance, one has to limit the power of the elite. This could be achieved by ... restricting elite discretion over the process of rent distribution" (p. 35f). In typical economist fashion, the authors see this as a solution that has to be implemented locally, within resource-rich countries. But they say nothing about how such a local solution can be implemented against the entrenched and repressive political and business elites. And they take as a given the global institutional background--do not mention, in particular, that the international resource privilege is as much a necessary condition of the elites' rent distribution power as the relevant country's resource affluence is.

(18.) The fact that the de facto ruler of a resource-rich developing country can sell these resources or use them as loan collateral, provides strong incentives to gain power in such a country, by whatever means. And, since the officials of such countries have resources to sell and money to spend, it is also more lucrative to corrupt them than their resource-poor peers. For those reasons, ample resources can become an obstacle to growth because they foster coups, oppression, and corruption. That they have this effect is, however, due in large part to the international resource privilege (as well as other global factors).

(19.) The average annual rates of change of real per capita GDP for these countries during the period of 1960-1995 are as follows (HDR 144-5): Nigeria 0.2 percent, Kenya 1.6 percent, Venezuela minus 0.2 percent, Brazil 2.6 percent, Saudi Arabia 0.7 percent, the Philippines 1.2 percent, Indonesia 3.9 percent. For two countries, available data are less comprehensive: For Angola the figure is minus 2.6 percent (1985-1995), and for Mozambique it is 0.2 percent (1980-1995). In short: Of the larger resource-rich developing countries, only Indonesia has significantly outperformed the developed countries in terms of growth in real GDP per capita.

(20.) See The Wall Street Journal, 14 July 1998 (A1 and A10). The World Bank is standing by its figures at least to the point of insisting that they "reflect" the actual reduction of Indonesian poverty.

(21.) The rulers of resource-rich countries have been especially successful at mortgaging the countries future for their own benefit. As of 1995, Nigeria's foreign debt, run up by its succession of military dictators, stood at $35 billion or 141 percent of GNP. The 1995 ratios of foreign debt to GNP for other large resource-rich countries are as follows: Kenya 98 percent, Venezuela 49 percent, Brazil 24 percent, the Philippines 52 percent, Indonesia 57 percent, Angola 275 percent, Mozambique 444 percent (HDR 172-173). Needless to say, little of that money was channeled into productive investments whose profits could help meet interest and repayment obligations. And much was channeled into the military, generally heavily involved in "internal security." In 1996, ratios of military expenditure to GDP were as follows: Nigeria 3.5 percent, Kenya 2.2 percent, Venezuela 1.2 percent, Brazil 2.1 percent, the Philippines 2.0 percent, Indonesia 2.1 percent, Angola 6.4 percent, Mozambique 3.7 percent (HDR 170-171).

(22.) It is likely that the international resource privilege includes a third dubious advantage that provides the more affluent states with more lucrative business opportunities: Corrupt supplier governments, made more common by the international resource privilege, tend to send much of their resource revenues right back to us, to pay for high-margin weaponry and military advisors, advanced luxury products, and real estate and financial investments. Democratically responsive supplier governments, by contrast, tend to spend more of their resource revenues domestically (stimulating the country's economy) and tend to get better value tot what they spend on imports.

(23.) With regard to many resources, the demand-market demand, or consumption--by the poorest quintile (and, in some cases, by the poorest four quintiles) is minuscule. It is evident that the price of crude oil, and of all the products containing a substantial crude oil component, would be very much higher, if global income inequality were less than it is now. As it is, per capita energy consumption in the developing countries is only about one-eighth or one-ninth of consumption in the developed countries (HDR 201).

(24.) This commission would obviously work only in the interest of democratic constitutions. Its findings would not merely determine whether a government enjoys resource and borrowing privileges but would also have consequences for its reputation and standing at home and abroad. A government that has been officially declared illegitimate would be encumbered in many ways (trade, diplomacy, foreign investment, etc.). In those ways, the proposed modification would tend further to reduce the incentives toward undemocratic rule, thus further reducing the frequency of coup attempts.

(25.) I want to thank Ronald Dworkin for seeing this difficulty and for articulating it forcefully.

(26.) It may be worth mentioning briefly an existing alternative proposal that would allow each country to authorize military interventions against itself for the event that a future government significantly violates democratic principles (Farer 1988) or human rights (Hoffman 1992). Proposals of this kind have three drawbacks: Military interventions will, sometimes at least, be bloody; decisions about intervention will generally be codetermined by extraneous (e.g. strategic) interests of the potentially intervening states; and (partly as a consequence of that) interventions will often appear as imperialistic interferences whose benefits for the oppressed population will be slight and incidental. Without rejecting (or supporting) such proposals, I have here suggested a less radical and less risky modification, which shows more clearly I believe (though I could not present all its details and all significant objections against it) that our current world order could, with some good will on the part of the affluent countries, be modified so that it would exert a significant force toward democratization.

REFERENCES

Farer, Tom J. 1988. The United States as guarantor of democracy in the Caribbean Basin: Is there a legal way? Human Rights Quarterly 10(12): 157-176.

HDR. United Nations Development Program: Human Development Report. 1998. New York: Oxford University Press.

--. 1997. New York: Oxford University Press.

Hoffman, Stanley. 1992. Delusions of world order. New York Review of Books 39(7):37-43.

Hohfeld, Wesley N. 1919. Fundamental Legal Conceptions. New Haven: Yale University Press.

Lam, Ricky, and Wantchekon, Leonard. 1999. Dictatorships as a political Dutch disease. Working paper, Yale University, New Haven, Connecticut.

The Economist 1998. 12 December, 19.

The Economist. 1996. Going on down, 8 June, 46-48

Tom J. Farer. 1993. A paradigm of legitimate intervention in Enforcing restraint: Collective intervention in internal conflicts, ed. L. Fisler Damrosch, 316-347. New York: Council on Foreign Relations Press.

United Nations Children's Fund. 1998. The State of the World's Children 1998 New York: Oxford University Press.

Walzer, Michael. 1980. The moral standing of states in Philosophy and Public Affairs 9:209-229

Thomas Pogge is professor of philosophy at Columbia University, New York, and has published widely in the areas of ethics and social philosophy. His most recent book is Realising Rawls. He has long been involved in groups dealing with human rights and matters of international justice and global institutions.

 

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