All countries are developing countries - the core functions of the state

I have been blogging – and thinking about stuff – for so long, that I can contrast my current thinking with my own post of nearly eleven years ago. Back in the day, I took the narrow/small government view on which few areas truly are core functions of a state. Now I’m not so sure.

First, think about the policies you would recommend to the government of a newly formed/newly independent poor/developing country.

Well, in no particular order, here’s a possible and non-exhaustive top ten…

1. Try and instil a sense of democracy, which only works if there is some sort of single national identity – democracy doesn’t work if a country is divided on tribal lines (you only have to look as far as Northern Ireland to see that, let alone the third world).

2. Eliminate corruption and have stable financial and legal systems, meaning private/contract law as well as public order (defence against internal enemies and protection of minorities, fire brigade). Separation of religion and state (OK, that’s most of the Middle East buggered).

3. Make sure you can defend your external borders (Ukraine messed up badly there a few years ago, they were so busy bickering over who should be in charge that the Russians just marched in and occupied the eastern half).

4. Get the infrastructure (roads, railways, airports, telephones, electricity and water supply) up and running.

5. Universal education up to a certain age, making sure that girls get equal treatment.

6. Public health – immunisation programmes, clean water and functioning sewage/refuse collection, pregnancy and natal care, free condoms. Cap prices that doctors and drugs companies can charge patients (it’s largely rent).

7. Make country open for foreign investment and trade but DO NOT let multinational corporations come in and rape the place. Tariffs and protectionism where absolutely necessary but they are to be phased out ASAP.

8. Decent housing for the poorest – meaning slum clearances and building state-owned affordable housing with electricity and running water etc.

9. Don’t let income inequality get out of hand. A stable society won’t thrive if a small business and political ‘elite’ are multi millionaires and the masses are struggling by on a dollar a day. Earned income is always the best kind of income, but having universal welfare/a basic income to patch up the survivors has always worked far better than expected.

10. As far as possible, fund government out of taxes on land values, natural resources and other monopolies. OK, maybe that’s just me, but wherever it’s been tried it has doubled the rate of progress.
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Now, having nodded along to all of that, where is the dividing line between developing and developed countries?

There isn’t one, it’s just that some are a few centuries ahead of others. If we were to come back in another millennium, most African countries will be miles ahead of where European countries are today (hopefully), and equally hopefully, European countries will be far ahead of where they are now.

All of which means, a country doesn’t just need to do steps 1 to 10 for a few decades until it is up and running and then decide to ‘leave everything to the markets’. It is a constant process that will go on forever.

For sure, the government/state-controlled bodies don’t necessarily need to do all the day-to-day stuff, a lot of it can be done by private businesses under state oversight/regulation, or by private providers competing for people to spend their health, education or housing vouchers with them, that’s details.