Something that communist leaders particularly demanded of state personnel was to exercise ownership and control rights over most productive capacity. Productive capacity under state ownership is completely overlooked in the state capacity literature. Indeed, it is not currently measured in any major cross-country historical dataset (as discussed in the appendix to this chapter).
A related aspect, administrative capacity, although found in the Hanson-Sigman short list, is seldom defined or investigated.[92] Building administrative capacity was a core project of communist state builders. None of their goals could be achieved without the subdivision and delegation of tasks. In turn, to build administrative capacity posed difficult tradeoffs between the scope and specialization of executive agencies.[93]
A feature of administration to which communist leaders gave especially close attention was the control function, as in the military sense of “command and control.” When commands were issued to officials at lower levels, how would higher officials know whether the commands were successfully executed?[94] In economically decentralized societies, much of the economic control function is given over to markets, prices, and profits. In command economies, the control function of prices was absent or weakened, so administrative control took its place and made very significant demands on state capacity.
Arising from this, but separate from it, was the capacity of the state to diagnose the level responsible for policy failures as they occurred: a policy might fail because of lack of effort or competence at lower levels, or because the policy itself was mistaken, in which case the fault lay above. In turn, this suggests the need for capacity to learn and correct errors. In an uncertain and fast-changing world, policy makers make mistakes. Decisions have unintended consequences. The multiplying losses associated with uncorrected errors may eventually grow to represent existential risks. To avoid these, the state needs an open channel for those willing to speak truth to power. When the message gets through, the state ought to be capable of responding by adjusting its policy settings, adapting its instruments, and reordering priorities.[95] This cannot be taken for granted, because those who seek power rarely wish to be corrected. Open political competition provides a mechanism for learning: the voters can decide whether a policy has failed and eject the authors from office. When political competition is suppressed, error correction must take place through an administrative process—if it is provided for.
A final dimension of state capacity is time. State capacity needs to be durable, because state breakdown invites civil violence and foreign intervention and is associated with persistent development setbacks.[96] What is known about the design of durable states? One form of constitution that is relatively sustainable is a state that coevolves with civil-society activism, allowing the citizens to participate in government and restrain government by laws.[97] Conversely, authoritarian directives that superimpose top-heavy controls on an unresponsive society have been shown to be ineffective or self-limiting.[98] But the evidence of communist states, which have shown surprising resilience (and sometimes fragility) in peace and war, is typically ignored or mentioned only in passing in the studies that are cited here.[99]
To summarize, state capacity can have many dimensions. Coercive, legal, fiscal, human, productive, administrative, control, and learning capacities all look as if they might have separate implications for the conduct of the state’s business—the more so, the more encompassing is the business of the state. Time is also a dimension of state capacity because an effective state must be durable.
This book investigates the relationship between secrecy and state capacity. When we look over the activities that make up state capacity, where does secrecy belong? On the face of it, secrecy belongs, first of all, to legal capacity. Legal capacity is the ability to create formal rules that allow people to resolve disputes without violence. Secrecy is the set of formal rules that restrict what people are allowed to learn, which limits the scope for people to engage in disputes in the first place. Then again, secrecy is closely related to coercive capacity: coercion restricts people’s choices by threatening them with violence, whereas secrecy restricts their choices by preventing them from learning about other possibilities. Based on examples we have already mentioned, secrecy keeps the adversary guessing. It is easier to coerce an adversary who has no idea when or where the next blow might fall, whether the adversary is a foreign enemy or a domestic opponent. In this sense, secrecy economizes on coercion.
Secrecy also turns out to affect all the other capacities. Think of administrative capacity, which is the ability to subdivide and delegate tasks in an organization. The secrecy involved in compartmentalizing information has the potential to make subordinates more compliant, because it deprives them of the information that could allow them to challenge orders or work around them, or to combine with other subordinates to resist the principal.
In the examples given so far, secrecy appears to augment state capacity. But in some other respects, state capacity might be impeded by secrecy. Think of human capacity, which is made up by the number and quality of public servants. Human capacity is influenced by secrecy because subordinates must be chosen who, in carrying out their tasks, can be trusted to keep the secrets they know and lack interest in the secrets that they do not need to know. It is a good question whether a state will be served best when officials are selected for pliability and lack of curiosity.
And it is straightforward to see how secrecy might impede the state’s capacity for error correction. Learning from mistakes and unintended consequences depends on two things—the free circulation of information and the sense that people are free to draw attention to policy failures—both inhibited by secrecy. A state that repeats mistakes because it cannot learn from them might eventually lose durability too.
To summarize, it seems that secrecy can augment several aspects of state capacity, at least up to a point. But questions arise along the way that suggest limits on the relationship. For example, lack of information that would allow officials or citizens to challenge policies and their implementation will eventually be damaging if it prevents errors from being corrected.
In this chapter I will suggest that the net effects of secrecy on state capacity are nonlinear: a certain amount of secrecy is likely to be capacity enhancing, but as secrecy becomes more intense, the net benefit to state capacities of various kinds begins to wear off and turns into a loss. The subject of this book is then how the Soviet rulers added to the state’s capabilities, what those capabilities amounted to—and how secrecy first added to them and then eroded them.
Does high state capacity promote economic development? To begin with, it can be seen that the wealthy market economies of the Organisation for Economic Co-operation and Development (OECD) all have high state capacity and that many middle-income and nearly all poor countries such as in the Middle East and sub-Saharan Africa do not.[100] This suggests that a capable state might be productive for economic development.
93
For historical discussion see Crowfoot and Harrison, “USSR Council of Ministers under Late Stalinism”; Pannell, “Growth, Stagnation, and Transition”; Gregory, Terror by Quota, 81-106; Markevich and Zhuravskaya, “M-form Hierarchy with Poorly-Diversified Divisions.”
95
Hall, “Policy Paradigms, Social Learning, and the State,” refers to these adjustments as policy changes of first, second, and third order respectively.
96
North, Wallis, and Weingast, Violence and Social Orders, 3-6. On the consequences of political failure, see Fouquet and Broadberry, “Seven Centuries of European Economic Growth”; Broadberry and Wallis, “Growing, Shrinking, and Long Run Economic Performance”; Broadberry and Gardner, “Economic Growth in sub-Saharan Africa.”
97
Acemoglu and Robinson call the domain of coevolution the “narrow corridor”; they call the competitive coevolution of state and society the “Red Queen” effect, and they call the result “Shackled Leviathan.” Acemoglu and Robinson, Narrow Corridor, 33-73.
98
Acemoglu et al., “Perils of High-Powered Incentives”; Acemoglu and Robinson, Narrow Corridor, 354.
99
Besley and Persson, Pillars of Prosperity; Dincecco, State Capacity and Economic Development; and Acemoglu and Robinson, Narrow Corridor. Surprising resilience and fragility in peace and war: communist rule has collapsed in Europe but persists in China, Vietnam, North Korea, and Cuba. Communist rule collapsed in the Soviet Union in 1991, at a time of international relaxation, but not in 1941 with the Kremlin in sight of an invading army. Exceptionally, experiences under communism are discussed by the authors of State Capacity Building in Contemporary China, edited by Naito and Macikenaite.
100
Besley and Persson, Pillars of Prosperity, 2-5; Dincecco, State Capacity and Economic Development, 2-6.