Prominence of Anti-Terrorism Ideology after the September 11 Attacks

By Yoon Jin Lee

Blyth (2002) argues that in situations of “Knightian” uncertainty, such as periods of economic crises, “the agents are unsure as to what their interests actually are, let alone how to realize them” due to uniqueness of events. In amidst of uncertainty, ideas particularly play a significant role in determining agents’ behaviors and their outcomes. This blog post characterizes the U.S. immediately after the 9.11 terrorist attacks as a situation of Knightian uncertainty. It delineates how the idea of anti-terrorism gained its prominence during this period and induced institutional changes. Specifically, the idea resolved collective action and coalition-building problems, was used as a weapon against existing institutions and served as the basis of new institutions.

The September 11 attacks left the country in surge of depression and uneasiness. Although responded differently, most people found the threat of terrorism real and acute. Hence, the unprecedented level of agreement on anti-terrorism was reached, which allowed the collective action against terrorism to successfully happen. For example, President Bush gained a broad mandate for his stringent anti-terrorist measures in the name of national security. The president’s approval rating, moreover, reached 90% after the U.S. attacks on Afghanistan. With the change in perception of costs and benefits of resorting to anti-terrorist measures, the U.S. could pursue the common goal of anti-terrorism.

The president, furthermore, used anti-terrorism ideology as a weapon against the existing institutions. He urged for reforms in the institutions in order to defeat terrorism, which had been previously not allowed because of the issues of human rights and basic freedom encroachment. But with the unprecedented level of agreement on anti-terrorist measures, the U.S. passed new legislations and amended the existing ones. One such act was an introduction of the U.S.A. Patriot Act that permitted “the U.S. security agencies to take invasive measures.”This clearly demonstrates how anti-terrorism ideology formed the basis of new institutions. Thus, after the 9.11 attacks that created a situation of Knightian uncertainty, anti-terrorism ideology played a significant role in inducing the U.S. institutional change.

The Failure of State-led Development in Equilateral Guinea

By Yoon Jin Lee

James Scott, in his book (1998), demonstrates the possible reasons why state-led development is unsustainable and unbeneficial. Two reasons that are most relevant to this blog post are: first, state-led development that exclusively pursues one purpose reduces the human capital of the state’s workforce; second, less diverse and less complex economy, usually resulting from state-led development, is more vulnerable to external shocks. We will now delve into a story of Equilateral Guinea that serves as a great example of the Scott’s argument.

Despite its dramatic economic growth after the discovery of huge oil revenues in 1995, Equilateral Guinea’s state-led development notably failed. The 2005 UNDP Human Development Index, for example, ranked the country 121st out of 177 countries.

Diminishment of the human capital by the Equilateral Guinean government accounts for the aforementioned failure. After the country became independent from Spain in1968, the newly elected president declared himself as “president for life” and suppressed his opponents and educated population. Consequently, one third of the population fled from the country, resulting in a lack of labor force and of educated people. Furthermore, after oil was found, the government started to exclusively invest in the oil sectors, which enticed laborers from agricultural sectors. This “resource-pull effect” diminished the already existing agricultural skills. Thus, the authoritarian government created “narrow, planned environments” in which there was no freedom for the people to take risks and learn how to face new challenges.

 A lack of diversity and complexity in the economy also accounts for the failure of state-led development. Aforementioned, after huge oil revenues were found, the government started to depend heavily on the oil sector. Consequently, the country’s oil exports drastically increased, with a further decline in exports of other sectors.

Figure 1: Timber and cocoa exports

 Figure 2: Equatorial Guinea: GDP by Selected Sector, 1994-2005

The result was economy that was highly vulnerable to volatile oil prices. For example, at the end of 2008, the oil price fell dramatically and largely harmed the country’s economic growth. This clearly is an unsuitable economy that is not beneficial for the country as a whole.

To sum up, the failure of the Equilateral Guinea’s state-led development exemplifies the Scott’s argument. Clearly, the state-led development highly likely results in the lack of human capital and the lack of diversity in the country’s economy, which in turn account for unsustainable and unbeneficial growth of the country.

Different Paths to Development

By Yoon Jin Lee

Acemoglu and Robinson, in Chapter 9 of Why Nations Fail?, argue that extractive institutions (in the case of most African countries, these were based on slavery), which were imposed by the former European colonizers, hindered African and Southeast Asian countries from industrializing. Hence, the economic development of European countries largely benefited from the underdevelopment in other countries and explains the world inequality today. To what extent does this argument apply to other cases? This essay attempts to evaluate the external validity of the authors’ argument by examining the case of Korea.

The Japanese colonized Korea for thirty-five years and extensively extracted labor, resources, and all kinds of Korean products for their own benefits. For example, by 1936, Japanese took control of two-thirds of total Korean land, with a dramatic decrease in the number of Korean owner-tenants, and an increase in the number of Korean tenants from 39.4 percent to 55.7 percent (5). This is similar to the case in South Africa where Europeans stole the land of Africans for their own economic benefits. But interestingly, although these former colonies experienced similar cases of slavery and extraction from the colonizers, South Korea is one of the most economically prosperous countries, while many African countries are still suffering from a massive poverty. This essay attributes this contrast to the difference in institutions set up by the colonizers.

The Japanese, although using Korea for their benefits, created “a strong central state [that] included solid institutions.” These institutions included corporate governance, banking systems and meritocratic bureaucracy, which barely or did not exist in many African countries (6-7). The Japanese implemented these institutions due to their ambition in using Korea for their war efforts and in bringing Korea completely under their control. In contrast, most Europeans, who merely wanted to extract cheap labor force and resources, implemented extractive institutions that prevented their colonies from developing. This difference in institutions, then, accounts for the difference in post-colonial developments between South Korea and African countries.

To conclude, Acemoglu and Robinson were correct to argue that extractive institutions of European colonizers hampered their colonies from developing. Thus, strong institutions are significant for a country to develop.