CHAPTER 4

WORKING WITH THE STATE

Building the Social Security Net

Early in 2017, in the midst of the despair of the US environmental movement in the aftermath of President Trump’s election, a strident call for optimism was released by Michael Bloomberg (former mayor of New York City) and Carl Pope (former executive director of the Sierra Club). Their book was titled Climate of Hope: How Cities, Businesses, and Citizens Can Save the Planet.

Bloomberg and Pope were sanguine, writing in their book’s preface that “through our work with cities, businesses and communities, we believe that we are now in a better position to stop climate change than ever before.” The book falls into many of the pitfalls of the free-market approach described in chapter 2, almost to the extent of parody. But Bloomberg and Pope call for an additional shift in thinking that sounds perfectly reasonable in theory (especially if we separate it from market-based nonsense). The authors argue that “instead of putting all hope in the federal government, let’s empower cities, regions, businesses, and citizens to accelerate the progress they are already making on their own. We believe that by changing the way we think and talk about climate, we can lower the temperature of the debate—and accomplish a whole lot more.”1

The argument is that local communities are more able, more capable, and more willing to tackle the issues of climate change (and, by extension, sustainability) than a lumbering national government. As engines of the national and global economy, city governments could, through concerted action, transform enough of the economy to make a serious difference.

This is the hope, at least, of those who support a “bottom-up sustainability,” whereby local, community, and grassroots initiatives take the lead in transforming the world economy. The argument is that states, especially in the developing world, are ineffective and corrupt. Even wellmeaning government officials are hampered by a lack of resources and weak institutions, which limit their ability to execute government policy. Finally, there is the question of justice: the idea that communities (rather than states or markets) should benefit from local resources, both in terms of profits and of minimized costs.

Chapter 2 discussed why neither markets nor technological development are appropriate alternatives to a state-led policy of sustainability. It highlighted the need for some social institution to exert governance: to make choices about what economic actions are appropriate in a resourceconstrained world.

This chapter will explain why governance must be exerted by the state, rather than by international institutions and agreements (i.e., global governance) or by villages, cities, or provinces (i.e., local governance). The state is the social body with the best combination of authority, accountability, and legitimacy to consistently manage the economy to support sustainability and to preserve resources for future generations. Neither the global nor the local communities have the capacity and institutions to directly exert governance themselves, especially when it comes to the complex and systemic issues of operationalizing sustainable development.

Chapter 5 will go into more detail as to what a strong state would look like, but it is important to bring up some definitions at this point so that we know what limits both global and local governance.

Authority is the ability to make decisions and implement them without resorting to violent coercion or naked bribery. When a totalitarian dictatorship forces its people to follow its orders or when a state buys loyalty through dividends from natural resources, then the state does not have true authority and is, almost by definition, not a strong state.

Legitimacy means that the government is seen by the population as a true representative of the “popular will.” This is connected to authority: the reason why people listen to a government, even if they personally disagree with its decisions or are even negatively affected by them, is that they see the government as the legitimate representative of the population.

In the mainstream discussion of politics, there is one way a government is seen to be legitimate: democratic elections. Even if nondemocratic states have performed better, directly elected governments are seen to be more legitimate. However, although Westerners see elections as the sole sufficient condition for legitimacy, elections are only one way to confer legitimacy, and may not be enough without a well-functioning government. A democratic system that encourages gridlock and political paralysis, or trades on existing divisions between classes, groups, or people, may have a fragile legitimacy, despite holding elections.

This is not to argue that all states should jettison democracy and become single-party authoritarian states likes China or Vietnam. But it remains true that these nondemocratic states have gone further in improving the lives of their citizens than democratic developing countries like India and the Philippines. And, to be frank, the Chinese Communist Party, despite not being elected, likely commands more popular support among the Chinese people than the Indian National Congress Party or the Bharatiya Janata Party have among the Indian people.

Finally, there is accountability: that a government is responsible for how its decisions affect the population, and that it has a system for changing policy if its policies end up hurting more than they help. If a state continually hurts the majority, yet does not change policy despite clear evidence, then it is unaccountable. Democracies can struggle with this just as much as nondemocratic governments. The US, for example, continually fails to pass even limited gun control legislation, even though a majority of Americans (67 percent, according to Gallup),2 and even a majority of gun owners (83 percent of whom support mandatory background checks on gun purchases),3 support “reasonable” controls. This is my definition of a weak state that does not represent the will and needs of the people to protect the public good.

One can understand why people look to global governance as the path to a more sustainable society. The externalities of our global economy are themselves global. When a consumer buys a smartphone in New York City, the repercussions ripple as far afield as South Korea, the Congo, and Ireland. Pollution from Chinese factories affects air quality in South Korea, Japan, and even California. Global consumption of plastic has led to massive islands of waste floating in the Pacific Ocean.

Then you have climate change, a problem so large and so systemic that it seems that only a concerted global effort will tackle the problems that underlie it. If any one of the world’s major emitters, be it the US, Europe, China, India, or any of the other rising economies, fails to meet its commitments, then the whole solution risks falling apart. The externalities of carbon are global: increased carbon emissions in the developing world lengthen droughts in Africa and the Middle East, erode shorelines in North America, melt permafrost in Russia and Northern Europe, and expand deserts in Western China. If externalities require government to resolve them, then the implication is that global externalities require global government. This is why a great deal of time and effort has been spent in successive climate change negotiations in the hope of creating a functional climate change agreement.

There have been some successes when it comes to global governance on environmental issues. The Vienna Convention for the Protection of the Ozone Layer, one of the earliest global environmental agreements, was passed in 1985. There are international agreements to manage wetlands, to clean up and provide compensation for oil pollution, to control the trade in endangered wildlife, and to address other environmental and conservation issues. Even if the results of these international agreements are mixed, they still represent an international consensus.

However, we must remember that states are ultimately responsible for enacting and enforcing international agreements. The institutions of global governance have few enforcement mechanisms, and a state unwilling to implement global directives—inevitably because it is weak—can stall the entire process. For example, the US has refused to join compacts such as the Convention on the Rights of the Child, the International Criminal Court, the Convention on the Law of the Sea, and now, most recently, the Paris Climate Accord—and in doing so has weakened each of these institutions. Washington has sometimes rejected these agreements in spite of the wishes of the US president and the foreign policy establishment, leading to strange situations in which Washington calls for countries to follow global rules while refusing to follow them itself.

What is more common, however, is the inability of states to implement the directives of global governance. Many international agreements are signed with a lot of fanfare but little discussion of how to actually achieve them and to distribute resources between signatories to ensure that action can be taken. This means that developing countries are asked to take on international obligations yet are offered no assistance to help fulfill them. The global agreement thus ends up being ineffectual, despite the best intentions of everyone involved.

Global governance can still play an important role, namely in presenting a global consensus on an issue. The Paris Climate Accord shows what global governance can and cannot do. The accord was the first global agreement on climate change in which each state both declared its responsibility for its own emissions and promised to develop a plan to slow, halt, or even reverse the growth in carbon emissions.

However, the accord provided no enforcement or punishment mechanism. It did set up a Green Climate Fund to help developing countries fund their carbon reduction plans, but doing so was a tense part of the negotiations (and ultimately one of the reasons cited for the US withdrawal).4 Its strictures are purely voluntary and depend on leadership at the state level. The global consensus on climate change has seemed to survive US recalcitrance for now, but there is still the risk that countries—advanced or developing—will slack off on their promises. And although leaders can sign up, their ability to act at home depends on how strong the state is. A weak, disjointed state will have no chance of pulling off the massive economic reshaping needed to meet the targets of the accord.

Perhaps the thorniest issue comes from attempts to regulate the global commons. As discussed in chapter 2, fisheries have been particularly difficult to manage, due to the ease of illegal fishing, the difficulty of monitoring large areas, and the benefits that come from “cheating.” Governments have tried to develop international institutions to monitor fisheries and report on illegal fishing. These Regional Fisheries Management Organizations (RFMOs) often include several countries as members and do their best to promote conservation. But it’s a big ocean out there, and the RFMOs are often underfunded and underequipped. They often need to cooperate with the fishing industry, which is, perhaps unsurprisingly, unwilling to provide much help.

When it comes to the authority of global governance, the exception that proves the rule is the European Union, which is perhaps the only supranational institution with real power to intervene in the affairs of its member states. The EU has a parliament, an executive, border controls, and a central bank. It can regulate goods and services across the common market, overriding state regulations if they come in conflict. It redistributes funds across the continent, collecting money from its members and delivering it to different projects. Although the EU does not have as much power as both its supporters and detractors often claim, it does have enough to actively manage and regulate a continent-wide economy. The EU’s directives are listened to by its member states, even if it is somewhat begrudgingly.

The United Kingdom’s decision to leave the EU both vindicates and shows the limits of the EU’s authority. The United Kingdom chose to leave the EU out of a wish to “take back control”—over immigration, economic regulation, and the funds it would send to Brussels. This argument implies that Brussels really did have authority over Britain, enough to make it want to leave the EU. But Brexit also shows that, even in Europe, states play a central role. Despite all the authority the EU had over Britain, the country was still allowed to exit. If Scotland had made the same unilateral decision vis-à-vis the United Kingdom, it would have been ignored. The state’s authority, even in systems of global or supranational governance, remains central.

Global governance also has serious issues with accountability and legitimacy: international institutions are neither seen as representations of any global opinion nor are they held responsible for the effects of their decisions. The most successful international institutions were, for the most part, constructed by the West at a time when the rest of the world was weak, and thus these institutions privilege Western countries, economies, ideas, and experts. They are now increasingly being challenged by “the rest,” leading to fears in the West about the rewriting of the world order. Some of these fears explain the rise of populism in the West.

Many of the most prominent institutions follow a Western paradigm, which can be inappropriately applied to the developing world. This is not to doubt the sincerity of the experts and analysts who work at USAID, the World Bank, the United Nations Development Program, or the Asian Development Bank. But, for the most part, the people working in these institutions have gone to Western schools, live in Western cities, and apply a Western historical experience to the rest of the world. They work within the fickleness of short-term aid cycles, are unable to commit to the long period of time necessary for development, and are institutionally handcuffed to the ideology of the main Western powers. Development experts in these global institutions devise countless projects that never succeed, and many white elephants are abandoned, with little long-term benefit for communities.

At worst, these institutions of global governance reinforce and maintain the superiority of Western ideas and of its military and economic power, which can blind those in the developing world to alternate solutions. This is also true today with regard to the shaping of the sustainability agenda.

The developing world will ultimately have to create its own institutions based on its own experiences and principles, much as what China has attempted to do with the Asian Infrastructure Investment Bank (AIIB). But the AIIB’s experience shows that the West may take a dim view to the creation of these alternatives. Despite Western and American commentators arguing that China needed to act as a “responsible stakeholder,” the launch of the AIIB was received coolly by Washington, which pushed its allies (e.g., Japan) not to join and publicly disapproved of those that did (e.g., the United Kingdom). The implication for the rest of the world was that a globally governed financial system was all well and good so long as the United States had the largest influence and can dictate terms.

But even if the developing world creates these institutions and signs more international agreements, they may mean little if developing countries are not strong enough to implement them. China, India, Indonesia, and other major economies may sign whatever agreements they want, but those agreements will mean little if no one ends up implementing them.

The day after President Trump withdrew from the Paris Climate Accord, a leader from the other side of the continent hopped on a plane to China. California governor Jerry Brown was greeted with a red carpet, and even Chinese president Xi Jinping took time out of his busy schedule to meet him.5 Governor Brown has highlighted California as a place where America could continue to pursue climate change action, yet he is merely the most prominent member of a growing contingent of local leaders who have stated their wish to continue the fight against climate change after the US withdrawal from Paris.6

One can understand why the environmental movement has latched on to these statements. California is the world’s seventh-largest economy. New York City (whose current mayor, Bill de Blasio, also expressed his support for climate action) is one of the world’s most important cities. Even if the federal government was unwilling to enact changes, cities and federal states may make up enough of the national (and perhaps global) economy to make a difference.

This argument has mostly come to the fore in the US, whose federal government seems to be stuck on almost every political issue (not just climate change), encouraging Americans to look elsewhere for necessary policy change. But, given how easily commentators expand American experiences to the rest of the world, it is only a matter of time before something similar is proposed globally.

The argument is that, in today’s modern economy, cities can act faster than larger and slower national governments. Cities could use their economic power to encourage people to make sustainable economic decisions even if national governments are unwilling to implement regulation. Cities attract talent, expertise, and business, and therefore have the resources to tackle sustainability in a way that poorer regions may find more difficult. Finally (if proponents were being honest), cities consume vast quantities of energy and raw materials, often at the expense of the hinterland, and thus have an obligation to improve themselves first before calling on others to do the same.

However, a focus on cities ignores how closely cities are integrated with their surroundings, drawing on resource extraction and agriculture in the countryside. Mass consumption of resources in the city encourages unsustainable industrial practices out in the hinterland, with large externalities placed on those who live there. These rural populations have no way to pressure the city government to change its economic practices; the city government is thus unaccountable to these groups.

Then add the global dimension: that major global cities engage in activities with repercussions across not just the country but the entire globe. For example, take one central element of city life (at least in the cosmopolitan centers of the world): the daily cup of coffee. World coffee consumption now stands at 152.1 million bags and will likely continue to grow.7 Yet coffee prices have remained low despite this increase in demand, which implies that costs are being kept low due to overproduction and underpricing. Coffee farmers are not benefiting from the coffee boom, because of both low prices and being forced to specialize in cash crops over foodstuffs.

Some cities may be altruistic enough to force local changes on behalf of those that live farther away, but they will likely be few in number and unlikely to go far enough. The urban economist Richard Florida noted that “blue-state knowledge economies run on red-state energy”8; in other words, the American states that are focused on services, technology, and “the cutting edge” are powered by cheap fuel and food from poorer states—Louisiana, North Dakota, Oklahoma, and others. Florida was writing within an American context, but his point could be extended globally: rich urban economies are fueled by poor rural economies. Rich cities can make themselves as environmentally friendly and sustainable as they like, but they will still extract excessive resources and “export” huge externalities around the world.

I will make one additional warning. The massive drive to urbanize has come at the expense of the countryside, whose economies and communities have stagnated, if not declined. This has encouraged a great deal of political resentment against the city for taking resources and talent from the countryside without giving anything in return or, worse, distorting the rural economy.

New Delhi and its constant struggles with water scarcity show the connection between the city and the countryside. India has built massive reservoirs that, during the dry season, release water saved during the rainy season. These dams are also used to provide electricity for India’s growing urban population.

These projects are controversial, as they often divert water that would normally go to sustain rural villages. The construction of more dams, irrigation systems, and canals deprives locations further downstream from being replenished, reducing the water resources available that sustains numerous smaller rural communities. But it also leaves New Delhi in a rather unstable position: the canal bringing water to the city is often a target for protestors who sabotage it in an effort to exert political pressure. One such protest in early 2016 disrupted water supplies to the whole city, reducing water flow by over two thirds. Schools and businesses in Delhi were forced to close, and water needed to be rationed.9 It should be noted this is not just any city in India. This is Delhi, the capital of the largest democracy in the world.

If a major city then tries to use its economic leverage to force rural communities to restrict economic opportunities in order to support sustainability in its immediate area, a backlash could emerge. A rural resident—already paying so much for a city’s massive growth—will be upset at being asked to sacrifice even more.

Finally, it is not clear that cities have much real independence, especially in the developing world. The tradition of municipal self-government is rare in the developing world (and in the West as well). Given that the problem stems from rapidly growing megacities in the developing world, it is not clear that city-driven sustainability will be applicable anywhere outside of a few rich Western countries.

Even if cities were to drive the sustainability agenda, the state would ultimately need to build the institutions that would allow cities to govern themselves. Thus, a precondition to municipal autonomy, especially in the developing world, is a strong state willing to set the preconditions for institutional development.

I want to make clear that these criticisms are not meant to impugn the principles behind city-driven sustainability. Cities should do everything they can to create a more sustainable urban economy. If their efforts move the needle in their countries, then all credit to them. But city-driven sustainability efforts are still a rich-state solution. Only rich cities have both the economic resources and the local autonomy to pursue sustainability initiatives on their own. More important, it is a solution that only makes sense as a stopgap solution if the state government has abdicated its responsibility (i.e., has become a weak state).

One final alternative is to focus on the local village and community as the body that exerts governance toward sustainability. Local communities are often closest to the environmental repercussions of resource extraction and depletion. They would have the best information as to what would work in terms of resource management. But most important, perhaps, is that a focus on villages would restore power and dignity, eroded by centuries of modernization, to local communities. Globalization, centralization, and marketization have overturned many of the communal structures that govern local communities and encouraged the growth-at-all-costs mentality that has ravaged the hinterland. Urbanization has drained these areas of the young and skilled.

Pushing sustainable development at the local level could reverse these trends. It could build a local authority that restores power to the village, brings back economic opportunities, and encourages people to stay (or even move back). It would invest power and meaning in small communities that have lost much in recent decades.

From my own experience, I know that villages will happily pursue sustainable development when given the opportunity and resources to do so. My work has brought me to numerous rural communities across Asia. In every one of these locales, work was being done to develop structures that would give villages access to the best agricultural techniques, expertise, inputs, and equipment that would allow them to farm cleanly, efficiently, and productively. The solutions often involved enterprises, including cooperatives, that could bring sure control and self-determination to the producers. These enterprises were designed to bring farmers and communities together to decide the future of the company and to strengthen their bargaining position with other entities along the supply chain. We tried to create a model that was easily replicable, so that other villages or regions could implement these ideas for themselves.

But I also know from experience how difficult driving local sustainability efforts can be. Many of these villages had lost real authority years ago. Community leaders found it difficult to overcome years of mistrust and neglect and to get their communities working together again. Some groups had been co-opted by large business, and corruption was a pervasive concern. Supply chains had been designed to disadvantage producers and rural people working the land, to allow urban consumers—the “engine” of economic growth—to consume more underpriced commodities. But more fundamentally, any initiative would have required time and effort on the part of villages and community leaders: resources they might not have been able to spare over an extended period. Some communities had even lost knowledge of farming techniques that had been developed over generations.

Much of the work with which I have been involved regarding rural development and sustainability was trying to build structures that could overcome these barriers. But this capacity building was limited by both our and their resources. This leads to a new question: How best to build governing capacity on the local level? Villages and NGOs can try to do it themselves, but their lack of resources will limit the speed and scale of their actions. Over time I concluded that the institution with the resources and authority to build local authority on a national level is the strong state.

In a perfect world, governance for sustainability would be carried out by a combination of strong states, empowered local communities, and trusted global institutions and agreements. Such a world could tackle both the local effects of environmental degradation and resolve the large-scale global externalities in our globalized economy.

We are not yet in that world. Too much work needs to be done to build governing capacity at both the global and local levels for either of those to take the lead on sustainability.

Focusing first on state strength can lead to village and community-driven sustainability later. A strong state can build local and community governance, delegating and embedding its “strength” in strong local institutions with the power, authority, and capacity to sustainably manage their surroundings. The same can be said about global governance. If one starts with strong states, then international agreements and institutions will be backed by governments that can actually do what they promise to do.

Of course, few states in the developing world are perfect. All the criticisms observers have made about these governments, though perhaps exaggerated, do reflect real concerns. They have problems with corruption. They can be easily captured by vested interests. Many have problems with accountability, with politics being dominated by a few elite families. Their reach is limited, and they have few resources with which to implement their decisions. Finally, there is the issue of competence: Can states actually carry out their objectives?

But those interested in creating a future based on the principles of sustainability should not use imperfection as a reason to ignore the state as an ally. The globe, the city, or the village, despite what people around the world may argue, cannot be a replacement for an imperfect state. Instead of looking elsewhere, people should instead strive to build strong states.

Chapter 5 will put forward a vision of what such a strong state would be.