Why nations fail | James Robinson | TEDxAcademy

Summary

El discurso explora por qué algunas naciones fracasan y otras prosperan, enfocándose en la disparidad tecnológica entre países pobres y ricos. Se argumenta que la organización de las naciones, más que la pobreza, determina el éxito económico. Ejemplos como Corea del Norte y del Sur, Zimbabwe y Grecia ilustran cómo instituciones inclusivas fomentan la innovación y la prosperidad, mientras que las extractivas impiden el desarrollo. La solución para los problemas económicos radica en la construcción de instituciones políticas inclusivas.

Takeaways

• 🌍 La diferencia entre países pobres y ricos se refleja en su organización y en cómo crean incentivos y oportunidades para sus ciudadanos.
• 💡 La península de Corea es un ejemplo visual claro: Corea del Sur es próspera con tecnología avanzada, mientras que Corea del Norte carece de acceso a tecnologías como la electricidad.
• 🚗 Los países pobres, como la República Democrática del Congo, tienen infraestructuras deficientes, educación limitada, y servicios públicos de baja calidad.
• 💸 No es solo cuestión de recursos: muchos países pobres desperdician recursos debido a la corrupción o la mala gestión, como se ejemplifica con Robert Mugabe en Zimbabue.
• 🔍 Las instituciones inclusivas, como el sistema de patentes en EE. UU., promueven la innovación al proteger los derechos de propiedad intelectual de todos, independientemente de su origen social.
• ⚖️ Los países con instituciones extractivas, como Zimbabue o Corea del Norte, limitan las oportunidades y bloquean los incentivos, lo que perpetúa la pobreza.
• 👥 La clave del éxito económico radica en una distribución amplia del poder político y en la existencia de un estado fuerte que haga cumplir las leyes.
• 🇺🇸 La prosperidad de EE. UU. se debe a instituciones inclusivas que fomentan la competencia justa y la innovación, a diferencia de los monopolios creados en México bajo instituciones extractivas.
• 🏛️ Las políticas inclusivas requieren una distribución equitativa del poder político y un estado capaz de hacer cumplir leyes justas, lo cual es fundamental para el desarrollo económico.
• 🇬🇷 Los problemas económicos de Grecia en la última década reflejan dificultades para reconciliar una democracia funcional con la construcción de un estado fuerte y no clientelista.

Q & A

¿Qué relación hay entre la luz en la península coreana y el éxito económico de un país?

La luz en la península coreana simboliza la diferencia en acceso a tecnologías como la electricidad entre Corea del Sur y Corea del Norte, lo que refleja la disparidad económica y la potencial limitante de la falta de tecnología en el desarrollo económico.

¿Cuál es una de las diferencias clave entre países pobres y ricos según el discurso?

Los países pobres tienden a tener peor tecnología, menor educación y salud, y servicios gubernamentales inferiores, como infraestructura, en comparación con los países ricos.

¿Por qué podría ser que los países pobres no inviertan en infraestructura y tecnología moderna?

Algunas personas piensan que los países pobres no pueden permitirse construir carreteras o usar tecnología moderna, pero el discurso sugiere que la verdadera razón es la organización de los países pobres que limita las oportunidades y incentivos para su gente.

¿Qué ejemplo se da sobre el desperdicio de recursos en países pobres?

Se menciona a Robert Mugabe, presidente de Zimbabue, quien ha estado en el poder durante 34 años y también ganó la lotería, insinuando que la riqueza y el poder在那里可能 se han concentrado en lugar de ser utilizados para el desarrollo económico general.

¿Cómo se relaciona el sistema de patentes con el éxito económico de un país?

El sistema de patentes en los Estados Unidos protegió los derechos de propiedad intelectual y creó incentivos para la innovación, lo que fue un estímulo importante para el avance tecnológico y, por ende, el éxito económico.

¿Qué es una institución económica inclusiva y cómo afecta a la sociedad?

Una institución económica inclusiva es aquella que permite que personas de diversos orígenes sociales tengan acceso a oportunidades y sean incentivados a innovar y crear, lo que a su vez promueve el desarrollo económico general.

¿Cómo se diferencia el modo en que Bill Gates y Carlos Slim acumularon su riqueza?

Bill Gates se hizo rico a través de la innovación en el software y la creación de una empresa, mientras que Carlos Slim lo hizo a través de la creación de monopolios en México, lo que restringió las oportunidades y los incentivos para otros.

¿Qué son las instituciones extractivas y cómo afectan a los países pobres?

Las instituciones extractivas son reglas sociales que dificultan los incentivos y oportunidades, lo que impide el desarrollo económico y mantiene a los países en la pobreza.

¿Qué dos secretos detrás del éxito económico de los Estados Unidos se mencionan en el discurso?

Los dos secretos mencionados son la distribución equitativa del poder político en la sociedad y el fortalecimiento del estado para hacer cumplir las leyes y proteger los derechos de propiedad intelectual.

¿Cómo se relaciona la distribución del poder político con la creación de instituciones inclusivas?

La distribución equitativa del poder político es crucial para la creación de instituciones inclusivas, ya que evita que el poder se concentre en少数人 y asegura que las leyes y oportunidades sean accesibles para todos.

¿Qué problema actual de Grecia se discute en relación con la teoría de las instituciones económicas?

El problema actual de Grecia se relaciona con la dificultad de reconciliar la democracia con la creación de un estado fuerte y eficaz, lo que ha llevado a políticas fiscales irresponsables y a problemas de deuda insostenibles.

Outlines

00:00

🌍 Diferencias entre países pobres y prósperos

El orador, James Robinson, explora la razón por la que algunos países son pobres y otros prósperos, citando la península de Corea como ejemplo. Muestra la disparidad tecnológica entre Corea del Sur, con mucha luz y electricidad, y Corea del Norte, que es mucho más oscura. Sugiere que la falta de acceso a tecnologías básicas como la electricidad limita el potencial económico de los países pobres. Además, menciona que los países pobres generalmente tienen menos educación, salud y servicios gubernamentales de calidad, como infraestructura.

05:01

💡 El sistema de patentes y la innovación

Robinson explica cómo el sistema de patentes en los Estados Unidos incentivó la innovación al proteger los derechos de propiedad intelectual, citando a Thomas Edison y su invento de la bombilla. El sistema, establecido por la Constitución de EE. UU., fue abierto a todos y fomentó la inclusión al permitir que personas de todos los estratos sociales solicitaran patentes. Esto contrasta con los países pobres que tienen instituciones económicas extractivas que limitan las oportunidades y los incentivos para la innovación.

10:03

🏛️ La importancia de las instituciones políticas inclusivas

El orador enfatiza que detrás de la prosperidad económica y la innovación se encuentran las instituciones políticas inclusivas. Menciona que la distribución equitativa del poder político y el fortalecimiento del estado son cruciales para crear un ambiente propicio para la innovación y la equidad. A través de la historia de Bill Gates y Carlos Slim, ilustra la diferencia entre la riqueza creada a través de la innovación y la riqueza obtenida mediante monopolios, que perjudican a la sociedad.

15:04

🌐 Desafíos políticos para la construcción de sociedades inclusivas

Robinson discute cómo la reconciliación entre la democracia y la construcción de un estado fuerte es un desafío en la creación de sociedades inclusivas. Argumenta que mientras más se distribuye el poder político, más se crea presión para debilitar la funcionalidad del estado, lo que conduce a políticas fiscales irresponsables y problemas de deuda insostenibles. Sugiere que la solución a estos problemas no es la austeridad fiscal, sino la reforma de las instituciones políticas para fomentar la inclusión y la equidad.

Keywords

💡Instituciones inclusivas

Las instituciones inclusivas son reglas o sistemas que crean incentivos y oportunidades para la mayoría de las personas en una sociedad. Estas instituciones permiten la participación amplia en actividades económicas y promueven la innovación y el desarrollo. En el video, se ejemplifican con el sistema de patentes en Estados Unidos, el cual permitía a cualquier persona, sin importar su origen social, proteger sus derechos de propiedad intelectual, fomentando la creatividad y el emprendimiento.

💡Instituciones extractivas

Las instituciones extractivas son aquellas que restringen los incentivos y las oportunidades, beneficiando a un grupo reducido a expensas del resto de la sociedad. Estas instituciones a menudo se caracterizan por la creación de monopolios y la corrupción, como el caso de Carlos Slim en México, donde el monopolio de telecomunicaciones generó riqueza personal a costa del bienestar económico del país.

💡Innovación

La innovación es la introducción de nuevas ideas, productos o procesos que aportan mejoras a la sociedad o al mercado. En el video, se menciona que una de las grandes diferencias entre los países ricos y los pobres es la capacidad de innovación. La innovación está ligada a la existencia de instituciones inclusivas, como el sistema de patentes, que incentivan la creación y la protección de nuevas ideas.

💡Monopolio

Un monopolio es una situación en la que una sola empresa o entidad controla un mercado o un sector, limitando la competencia. En el video, se menciona que Carlos Slim creó un monopolio en el sector de telecomunicaciones en México, lo que redujo la eficiencia económica y los ingresos nacionales, contrastando con la competencia promovida por instituciones inclusivas como las de Estados Unidos.

💡Distribución del poder político

La distribución del poder político se refiere a cómo se reparte la autoridad y el control político dentro de una sociedad. En el video, se argumenta que una distribución amplia del poder político es esencial para crear instituciones inclusivas. Un ejemplo es Estados Unidos en el siglo XVIII, donde el poder político estaba lo suficientemente distribuido para evitar la manipulación del sistema de patentes por parte de una élite.

💡Estado fuerte

Un estado fuerte es aquel que tiene la capacidad de implementar y hacer cumplir leyes de manera efectiva. En el video, se menciona que un estado fuerte es necesario para proteger los derechos de propiedad intelectual y aplicar leyes antimonopolio, como se ve en el caso de Estados Unidos con la intervención contra monopolios como el de Standard Oil.

💡Clientelismo

El clientelismo es una práctica política en la que los recursos del estado se utilizan para obtener apoyo político, favoreciendo a individuos o grupos específicos en lugar del interés público. En el video, se menciona cómo el clientelismo ha afectado a Grecia, dificultando la creación de un estado fuerte que funcione con base en principios universales y no en intereses privados.

💡Incentivos

Los incentivos son motivaciones que impulsan a las personas a actuar de una manera específica. En el video, se explica que los países con instituciones inclusivas crean incentivos para la innovación y el crecimiento económico, mientras que los países con instituciones extractivas, como monopolios, eliminan estos incentivos, frenando el desarrollo.

💡Desigualdad económica

La desigualdad económica se refiere a la disparidad en la distribución de la riqueza y los ingresos dentro de una sociedad. En el video, se aborda cómo las instituciones extractivas contribuyen a la desigualdad, ya que concentran la riqueza en manos de unos pocos, como en el caso de los monopolios en México, mientras que las instituciones inclusivas promueven una distribución más equitativa de la riqueza.

💡Prosperidad económica

La prosperidad económica es el crecimiento y bienestar económico sostenido de una sociedad. En el video, se analiza cómo la prosperidad está directamente relacionada con la presencia de instituciones inclusivas que fomentan la innovación, la educación y la infraestructura, a diferencia de las instituciones extractivas que limitan estas oportunidades.

Highlights

Las naciones pueden fallar o tener éxito debido a diferencias en tecnología, educación, salud y servicios gubernamentales.

La península de Corea a la noche muestra la disparidad tecnológica entre Corea del Norte y Corea del Sur.

Los países pobres suelen tener una tecnología mucho más limitada que los países ricos.

Los países pobres tienen menos educación y salud, y sus habitantes viven menos tiempo.

Los servicios públicos y la infraestructura son mucho peores en los países pobres.

La distribución de recursos en los países pobres a menudo es ineficiente y se desperdicia.

Robert Mugabe, el presidente de Zimbabue, ejemplifica la mala gestión de recursos en los países pobres.

Los países pobres y ricos se organizan de manera muy diferente, afectando las oportunidades y incentivos de sus ciudadanos.

El sistema de patentes de Estados Unidos incentiva la innovación y la protección de propiedad intelectual.

El sistema de patentes fue establecido por la Constitución de EE. UU. y promueve la inclusión y la innovación.

Las instituciones económicas inclusivas, como el sistema de patentes, fomentan el desarrollo económico.

Bill Gates y Carlos Slim son ejemplos de cómo los países ricos y pobres tienen diferentes enfoques para la generación de riqueza.

Las instituciones extractivas, como los monopolios en México, impiden la innovación y las oportunidades para otros.

La distribución de poder político y la fuerza del estado son cruciales para la creación de instituciones inclusivas.

La lucha contra los monopolios y las instituciones extractivas es esencial para mantener una sociedad inclusiva.

La crisis griega refleja la dificultad de reconciliar la democracia con la construcción de un estado fuerte y eficiente.

La solución al problema económico en Grecia y otros países es política, requiere la construcción de instituciones políticas inclusivas.

Transcripts

Translator: Chryssa Takahashi Reviewer: Peter van de Ven

Thank you very much. I am James Robinson.

I am going to talk about why nations fail and why nations succeed as well,

which is really about why some countries are poor

and some countries are prosperous.

It turns out you can tell a lot about the answers to that question

by looking at the Korean peninsula at night.

If you look at Korean peninsula at night, you see some obvious things.

That South Korea has a lot of light, electricity.

North Korea, on the other hand,

is rather dark.

There you can see a spot of light.

That's probably the presidential palace in Pyongyang.

(Laughter)

Now, there could be different reasons why North Korea is very dark at night.

It could be that North Koreans have electricity and light bulbs,

but they just think candles are more romantic.

(Laughter)

It could be, on the other hand,

that North Koreans have electricity and light bulbs,

but they are just trying to reduce their carbon footprint.

I think, however, the more plausible explanation

is that actually North Koreans don't have access to the types of technologies

like electricity and power and light bulbs that South Koreans do.

And that enormously restricts their economic potential.

So one thing we know about the difference between poor countries and rich countries

is that poor countries, like North Korea,

tend to have much worse technology than rich countries.

Let me tell you about some other things we know

about the differences between poor countries and rich countries.

Poor countries have much less educated people.

They tend to have much less healthy people.

They live shorter lives.

They have much worse government services, like infrastructure.

So, here is an idyllic Congolese driving scene in a part of the world

where I do a lot of research, the Democratic Republic of the Congo.

This is what they call, somewhat ironically in the Congo, Interstate No 1.

And you can see that driving on Interstate No. 1,

you spend a lot of time digging your car out of sand and mud.

This is the dry season. If it was the rainy season, forget it.

You are not going anywhere.

So poor countries have much worse infrastructure public services.

So why is it that poor and rich countries differ in terms of their public services,

their technologies, their levels of education?

Well, some people think that it's just that poor countries

are too poor to afford to build roads,

or too poor to use modern technologies like electricity and light bulbs -

not that modern, really, if you think about it.

But anyway, they're too poor to use it.

But I didn't think that's right.

Most of poor counties where I do research,

lots of resources that could be used for these things are wasted.

Now, here is an example of that.

You may know this gentleman. He is called Robert Mugabe.

He is the president of Zimbabwe.

He has been president for 34 years.

You think, you probably known him as a good politician.

What you didn't know is he's also a remarkably lucky man.

In fact, he won the lottery. So how about that?

Someone who is a great politician and he also wins the lottery.

I mean, come on. Does Greece have politicians like that?

I mean, Britain doesn't.

So, he is a lucky guy, and I am thinking, I am sort of trying to suggest

that this may not be completely coincidental

that he happens to have been president for 34 years

and he also in his spare time wins the lottery.

(Laughter)

That road, by the way, I showed you in 2010 in the Congo,

in 1960 that was a nice tarmaced surfaced road

that has since deteriorated into the bush.

So I don't think the real reason that poor countries are poor

and prosperous countries are prosperous

is that poor countries just cannot afford

to do the sorts of things necessary to become rich.

I think the explanation is,

and that is what I am going to argue in the rest of my presentation,

that poor countries and rich countries are organized in very different ways.

And that organization in rich countries

creates incentives and opportunities for people,

and in poor countries, it doesn't.

In fact, most poor countries are organized in ways

which block people's incentives and block people's opportunities.

And that's what creates poverty.

So let me give you a very specific example of that

which I've realized it is sort of the theme, you know,

it's almost the motif of the whole event, which is the light bulb.

I was only expecting to connect this to North and South Korea,

but there we had all these light bulbs and Shakespeare that started the day.

So what is this?

This is a patent.

It was taken out by Thomas Edison in 1880, who invented the light bulb.

So Edison had an invention.

And what did he do? He took out a patent.

The patent protected his intellectual property rights.

It stopped people from copying his idea.

And that created incentives for people to innovate.

So, that was a very important stimulus for innovation in 19th century U.S.

Let me tell you a few other things about the patent system.

The patent system was actually set up by the US constitution.

The first patent law's in 1790,

and Thomas Jefferson, not Thomas Edison,

one of the founding fathers of the United States,

was actually on the first patent board handing out patents.

The system was open to everybody.

So, it didn't matter who you were, you could pay the same fee,

you got a patent,

and the government protected your intellectual property rights, OK?

Now, that's absolutely crucial because we know as economists

that one of the huge differences between poor and rich countries

is exactly innovation, exactly technological change.

It's that new technologies that don't spread

from South Korea to North Korea.

So, here's an example of would call an economic institution,

a kind of rule that creates incentives and opportunities in society,

and this institution has a particular property

which I'm going to call inclusive.

It's inclusive in a particular and important way

because if you look at who are these people who are filing patents?

You know, Thomas Edison. Who?

What were their social backgrounds?

Well, it turns out, they came from all over society.

Poor people, rich people, elite, non-elite,

farmers, artists, professional people, educated people, non-educated people.

Talent, ideas, skill, creativity, entrepreneurship

are spread very broadly in society.

And if you want to have a prosperous society,

you need to have a set of institutions

that can harness all that latent talent in society.

That's what inclusive institutions are about,

and that's exactly how the patent system worked.

Countries like Zimbabwe, or Democratic Republic of Kongo,

or North Korea, which are poor,

have economic institutions

that create very different incentives and opportunities

than inclusive economic institutions like the patent system.

To illustrate that in a richer way,

let me bring time from 1880 right up today,

and talk about why the United States is richer than Mexico,

just across the border.

I'm going to do that in a very particular context.

I'm going get you think about the two richest men in the world,

Bill Gates and Carlos Slim.

Bill Gates from United States of America, Carlos Slim from Mexico.

What's really interesting about the comparison

is the way those people made their money.

Bill Gates was an entrepreneur.

He set up a company when he was a Harvard undergraduate.

He made a fortune through innovation in the computer software industry.

Carlos Slim, on the other hand,

made a fortune through creating monopolies,

and through owning a monopoly, a telecommunications monopoly.

According to the Organization of Economic Cooperation and Development,

Carlos Slim's monopoly created an enormous amount of wealth for him,

reduces national income in Mexico by about 2% a year,

for the period of 2005 to 2009 it actually reduced income in Mexico

by 130 billion dollars.

So, in the United States,

Bill Gates responded to the inclusive nature of institutions,

creating incentives, creating opportunities.

What happened?

He generated innovation, he generated new ideas,

and that created wealth for him,

it created a vast amount of wealth for society.

What happened in Mexico was something very different.

The way to create wealth was not through innovation,

but through creating monopolies.

Monopolies block other people's opportunities,

and they block other people's incentives.

Extractive institutions is what I'm going to call the opposite of inclusive.

I gave the patent system as an example of an inclusive economic institution.

Let me say that there is something else,

and that's what's going on in Mexico, in North Korea, and Zimbabwe.

I'm going to call that extractive economic institutions.

Rules in society that impede incentives and opportunities.

So, that's the difference between poor and rich countries, in a nutshell.

But now, let's go one layer back in the onion

and ask, "OK, fine. So how come the United States ended up like that?"

or "How come Mexico is like that?"

and "Why is Zimbabwe like that?"

The example of president Mugabe winning the lottary

is perhaps meant to plant a seed in your mind.

And so now, I'd like the seed to sort of grow a little.

But I'm not going to grow it in Zimbabwe.

Let me go back to the United States and back to the patent system, back in 1790,

when Thomas Jefferson was on the patent board,

and get you to think,

"OK, so how come they ended up with this patent system like this?

What was the secret?"

And I think there were two secrets, and they are very political.

So, ultimately, I think what matters for economic prosperity,

for success and failure, is inclusive and extractive economic institutions.

But lying behind that is politics.

And I want to emphasize two dimensions of politics.

One is, how did you end up in the United States

with this patent law that treated everybody equally,

that gave everybody equal access to patenting on the same terms.

That was because in the United States in the late 18th century,

political power was sufficiently broadly distributed in society,

but you couldn't have some oligarchive patent system.

You couldn't have a patent system where Thomas Jefferson could decide,

"Mmm, maybe you get a patent, and maybe you don't.

Maybe I'll give you a patent, but I don't like your face.

You're not getting a patent."

That wasn't possible, given how democratic US society was at that time.

So, one thing which is important about creating these inclusive institutions

was the distribution of political power in society.

The broad distribution of political power.

The other thing was important, was at that time,

the United States had a strong state that could enforce the patent.

It wasn't just a matter of passing the law,

it was enforcing the law.

The state would come, and they would protect your intellectual property rights.

So, these two things are very important.

So let me bring that to the present

and show you a photograph of Bill Gates in Washington DC.

Now, what is he doing here?

He's giving testimony to the US anti-trust authority.

Here's the strong US state in action.

Both of these elements that I talked about,

the distribution of power and the strength of the state

are crucial for understanding

the difference between Bill Gates and Carlos Slim.

How did Carlos Slim get his monopolies?

It was a one-party state, the PRI, the one-party state,

which had been in power since the late 1920s,

in the 1990s, privatized a monopoly to Carlos Slim.

Mexico has very nice anti-trust laws.

But it's inconceivable that Carlos Slim would have to do what Bill Gates did,

which was to come and, you know,

"I swear to tell the truth, the whole truth and nothing but the truth,"

in front of anti-trust authorities in Washington DC.

So, this is the power of the state.

And if you think about both of these examples,

both of these elements come in.

The fact that Carlos Slim could create his monopolies

because political power was not broadly distributed in Mexico,

and the anti-trust laws that exist in Mexico cannot be enforced,

because the state is too weak to enforce them.

In the United States it's inconceivable

that you could have such a monopolization of industry,

and the state is capable of enforcing the law.

And in fact, anti-trust laws are a fascinating example.

If you go back to a hundred years before this.

This is the octopus of the Standard Oil Company.

The Standard Oil Company was run by John Rockefeller.

It was an enormous attempt to build a monopoly in the United States.

You can see here, it's got its tentacles around the White House,

it's got its tentacles around the politicians, around Congress,

it's enveloping the political system with its wealth and connections.

It was broken up by federal anti-trust authority.

So, there's a long battle against monopolies,

against extractive institutions in an inclusive society.

So, what about Greece?

(Laughter)

Let me say something about Greece.

How does Greece fit into this?

Well, of course, compared to Zimbabwe, or the Democratic Republic of the Congo,

or Haiti, or North Korea, Greece is an enormous success.

Greece has been enormously successful, economically, in the past 100 years.

It's diversified its economy,

it's raised people's living standards enormously,

it's broadened education, health, etc.

But I think, the problems of Greece in the last decade

stem from the problems of reconciling these two dimensions of politics

that you need to create an inclusive society.

Reconciling, building an effective strong modern state

with having a democracy

where political power is broadly distributed.

Now, when I talked about the United States

you might have been thinking, "Gosh, these things smoothly come into place,

you have one thing, you have the other.

You want to have a broad distribution of power

that makes the state accountable.

You want to have a strong state because that makes democracy effective.

You can enforce the rules,

but I think the more you look, and the more you think,

you see that actually in many contexts

these two dimensions are difficult to reconcile.

They sometimes have an enormous contradictory feature.

And I think that's part of the problem in Greece,

particularly since the redemocratization in 1974,

is that Greek society has found it difficult to reconcile

building an effective central state based on rules.

Remember my example of the patent system,

how crucial it was that this was a rule, the patent system applied to everyone,

the same rules applied to everyone.

That's what generated these incentives and opportunities.

If Thomas Jefferson had been handing out patents to people on the basis,

"Hey, I want to be president, so if you support me,

let's start building a coalition, then you get your patent."

"I don't like your face. You don't look like you're going to be on my team.

You're not going to get a patent."

If that had been how the US patent system worked,

then it would not have the incentive effects,

the effects on innovation and economic development, that it did have.

And I think that once you think about it,

you can see that when you increase political power,

when you create political power broadly in society,

that can create pressures to undermine the functionality of the state.

To undermine the strong state.

To make the state become a tool of the political struggle

rather than a neutral arbiter of new rules and universal principles.

And I would say, that's the root cause of a lot of the problems,

from my perspective, in Greece.

Trying to make the state work properly, to enforce rules,

to not be clientalistic, to enforce universal principles.

And a lot of the economics stems from that.

The way I'm talking now is sort of politics.

Politics, it's about politics. Economics is crucial.

But economic institutions and economic incentives and opportunities

are embedded in a political society.

And they stem from a political process.

And I think that's being the problem in Greece.

Think about the deficit or the fiscal problem.

Why has that happened?

That didn't happen for some technical reason.

It didn't happen because Greek governments had the wrong economic advisors.

It happened because of this problem of reconciling democracy

with creating a strong state.

If the state becomes a tool for serving private interests

and not public interests,

serving individuals and not following the collective welfare in society,

then of course you're going to have terrible fiscal policy

and unsustainable debt problems.

Stable macroeconomic policies are public good,

but if the state become clientalized, it's not about providing public good.

It's about providing private goods.

So who's internalizing the debt or the deficit? Nobody.

So, that's a natural context to get unsustainable fiscal policy.

So what's the solution to this?

Not fiscal austerity.

Fiscal austerity might be necessary to keep the Germans happy,

but you're treating the symptoms, not the cause.

The cause is political.

The solution to the problem is to find a way of reconciling

these two elements to build inclusive political institutions.

And where does that come from?

That's a political project.

That'a about organizing people collectively.

Clientelism is always individually rational,

it's just not collectively rational for society.

So, you have to build a project.

Politicians have to build a project to build the state,

to build a non-clientelistic state,

to reform the interface between state and society in Greece.

And if you ask me, am I optimistic or pessimistic about Greece,

then I'd start looking at the politics, and I'd start looking at civil society

and ask, "Who has that project? Where is it?"

(Applause)

Thank you.

(Applause)