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Why Fukuyama Still Beats a Drum for Democracy

American author and political scientist Francis Fukuyama has long extolled the virtues of democracy against the backdrop of the Soviet Union’s collapse and the end of the Cold War.

Fukuyama’s best-selling book The End of History and the Last Man tapped into the spirit of that dramatic period more than 25 years ago by proclaiming liberal democracy the last stop on history’s long road.

In recent years, memories of what many called democracy’s Cold War victory have dimmed with the rise of economic powerhouses linked to political systems such as China’s that do not rely on the one-man-one vote model.

But in a recent interview with Caixin in Beijing, Fukuyama said he remains committed to the premise that the modernizing human family is marching toward political systems that balance rule of law, “state capacity,” and democracy.

Of course, Fukuyama said, it is possible for a strong state to succeed economically without democracy. But democracy builds stability and legitimacy, he said, which in turn supports growth and helps governments survive economic crises.

”I think that, in the long run, transitioning to democracy makes the whole system stable and legitimate, and therefore is good for growth,” Fukuyama said. “I think that’s why most rich countries in the world today are actually liberal democracies.”

Fukuyama hasn’t always cheered liberalism. For about a decade starting in the late 1990s, he was a prominent figure in America’s neoconservative movement. He later distanced himself from that ideology.

These days, Fukuyama wears several hats as a professor, writer, and researcher working for Stanford University, Johns Hopkins University, and other institutions. His latest book, Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy, was published last year.

Fukuyama said he is keenly interested in China’s past, present, and future development. He’s keeping tabs on the country’s economic reforms and anti-corruption campaign. And he thinks “it’s important for everybody to understand” today’s China as a country that has “never been integrated into the global system to the extent that it is now.”

Excerpts from his interview with Caixin follow.

Caixin: You made a name for yourself in China at the end of the Cold War in the early 1990s with your book The End of History and the Last Man. In the two decades since, there have been many ups and downs. Have any recent world events changed your thinking?

Francis Fukuyama: I haven’t changed my mind on the fundamental question of whether or not there is a direction to history as societies evolve and modernize. What kind of society stands at the end of the modernization process? I believe, as I did 25 years ago, that it is some form of liberal democracy and market economy. I don’t think that anything that’s happened since then has really changed that perspective.

In the past 35 years, we have seen many events around the world that actually run counter to changes leading toward liberal democracy. How do you interpret this?

Actually, since 1970 the total number of democracies in the world has gone from about 35 to 110. What’s happened in the last eight years is there’s been a decline, especially in places like Russia, Turkey, and so forth. What we don’t know is if it’s going down a little bit, but then the trend will be up, like a stock market correction, or whether this represents a larger shift. But I think that despite all the problems that America and Europe have experienced, such as financial crises in both places, it’s still a very durable and sustainable form of government.

In your books The Origins of Political Order and Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy you emphasize the building of state capacity. As a result, some now say anyone who believes history ends in liberal democracy can be considered a “statist.” Is that true?

No, it’s not true. What I say is that good political order depends on balance. On the one hand, you do have to have a state that’s strong enough to protect the community and provide basic public goods and services. But that state has to be constrained, on one hand by rule of law and on the other by democratic accountability. If you have just the state without those institutions of constraint, then you have a dictatorship. And that’s the situation here in China.

On the other hand, if you only have democracy and law but a weak state, then you don’t have a good system, either. So you really need balance. You really need all three at the same time.

Ten years ago, your model for state capacity was quite simple. It was based on the scope and strength of state capacity. How have you transformed this model into your current grand institutional theory?

A lot of my thinking is driven by the discussion in America. Americans love to argue about the scope of the state. Republicans want small government, Democrats want big government. My view is that this is the wrong argument. You can have a successful society with a large state and you can have a successful society with a small state. You cannot have a successful society without a capable state. Whether it’s large or small, it’s really critical that the state has the capacity to actually deliver the things that it promises. That’s something I probably wasn’t as aware of when I wrote The End of History.

I think that there are many countries that regulate too much or interfere in the lives of their citizens too much. They should be scaled back. I think, however, that if the state does these things well, and if people accept these things as legitimate, then there are no problems.

That’s what Scandinavia is all about. Scandinavia is a social democracy. You have a big welfare state, high taxes. But people get a lot of good services in return for the taxes they pay, so they’re fairly content with that.

We have been talking about the “rule of law” and the “rule by law.” What is the difference, and is it possible to migrate from rule by law to rule of law?

Rule by law is just the commands of the state or sovereign. With rule of law the sovereign itself, the most powerful people in the state, are also constrained by the same laws that constrain everybody else. That means that rule of law is fundamentally a limitation on the power of the state. It means that the president or the prime minister can’t just change the rules when it’s convenient but have to abide by them as well.

Is “rule by law” more progressive than “rule by man”?

It is definitely better to have rule by law than discretionary authority, whereby rulers can do one thing one day and another thing another day. This is especially true from the standpoint of economic development. If you want to invest or start a business but don’t have predictable rules about property or how to adjudicate disputes, you’re not going to be a businessman. You’re not going to take any risks.

Is it possible to have a healthy transition from “rule by law” to “rule of law”?

The thing about rule of law is that it’s a limitation on power. Usually, people with a lot of power don’t just voluntarily give it up. It takes political pressure. There have been countries that have made a peaceful transition from rule by law to rule of law. For example, Denmark and Sweden were both absolutist monarchies in the 18th century, and in the 19th century they agreed to transition into a constitutional system in which the king limited his own power voluntarily.

Of your three key factors—government capacity, rule of law, and democracy—which is the most significant for economic development?

It partly depends on the context, but some combination of state capacity and rule of law. The economists really emphasize property rights and rule of law. I think if you have a state that is able to back that up with enforcement and is reasonably impersonal, then you’re going to have strong economic growth. That’s been the story of a lot of East Asian countries . . . They had a relatively weak rule of law or no rule of law in some cases. Yet they had pretty good economic growth because they had an administratively capable state.

Does a transition to democracy always come with a cost in terms of economic growth?

No. I think that in the long run, transitioning to democracy makes the whole system stable and legitimate, and therefore is good for growth. I think that’s why most rich countries in the world today are actually liberal democracies. The stability of the state is not just based on whether or not in the short run you can produce investment and growth. It’s legitimacy. Do people buy into the system? That’s where I think the democracy part becomes important.

When you say long term, do you mean 100 years?

I think that political time has accelerated in the modern world. Many institutions that took hundreds of years to emerge in Europe or North America might happen more quickly now because there has been learning. Societies can copy models. For example, when Japan modernized in the late 19th century, they did it very rapidly because they could pick up technology and systems from the West.

With your three factors in mind: accountability, rule of law, and state capacity, where do today’s major parties such as China, America, Europe, Russia, and India stand?

I think China is at one end of the spectrum. It’s got a very strong state, but a really weak rule of law and no democratic accountability, at least in terms of formal elections. I think that India and the U.S. are the same in the sense that they both have a strong rule of law. They certainly have vigorous democracy.

India is much weaker than the United States, but they both have relatively weak state capacity. Singapore is somewhere in the middle because it doesn’t have room for elections, but it does have a strong rule of law.

I think European countries such as France, Germany, etc. are more toward the American side. In Europe, however, there are stronger states because those societies evolved out of monarchies in the 19th century, and they have a stronger tradition of centralized government. America, in a way, is a very exceptional democracy because of the American Revolution and North American experiences. We distrust political power, and therefore we’ve always put more constraints on political power than other democracies and other parts of the world.

Russia is in an unfortunate situation where rule of law really doesn’t exist. The Russian elite basically take what they want and they adjust the laws. It’s more the rule of man. On the other hand, they do have democratic elections, and Mr. Putin is very popular right now. But because of state capacity, I think Russia is actually a much weaker state than it appears. It’s much weaker than China.

Why is American civilization in decline?

I don’t think American civilization is decaying. I think the economy is actually doing very well and is very innovative and entrepreneurial in information technology, energy, and many different sectors. The problem is with the government. My definition of decay is when powerful elite groups are able to capture political powers that protect their own interests. I think there is some evidence with the rise of big interest groups and big lobbyists that this happened in the United States over the last couple of decades. The other problem, I think, is the extreme degree of partisan polarization between the two political parties that has really deadlocked the U.S. government and made it hard to make basic decisions.

Why does China interest you?

For a lot of reasons. Obviously, China’s emergence is a really important event. It’s an important event for the world. In a way, China was always a big, powerful country, but it’s never been integrated into the global system to the extent that it is now. So I think it’s important for everybody to understand it.

The other thing is, as I was doing the historical research on China, it seemed to me that there’s so much in Chinese history about being a civilization that people aren’t aware of. The richness of that tradition, that in itself I find really fascinating.

What role might the rising middle class in China play in transitioning to the rule of law and what you call a modern state?

I think middle class people in almost any society, regardless of their culture, behave differently than poor people do. Especially if you define middle class in terms of education. If you have a university education, if you are working in a profession, if you have assets like a house or a car that the government could potentially take away from you . . . [then] middle class people tend to be much more demanding. Their expectations are higher, including what they expect of government.

Some argue China’s success over the past decade has been based on state capitalism. Do you think this idea is legitimate?

China has done very well in the past, but the old China model has got to change. China is not going to keep up the kind of growth that it has. It’s already fallen to 7 percent, and for a variety of reasons it’s almost inevitable that it’s going to go lower. The one thing that China hasn’t really experienced is a severe setback or a recession. I think you cannot test the sustainability of a political system unless it’s put under a great deal of stress. That’s a test I’m not predicting China will fail, but it hasn’t happened yet.

I’m not sure that state capitalism is really the secret to China’s success. If you look at the productivity of state-owned enterprises in China, it’s much lower than for the private sector. I would say that the state-owned enterprises have been kept more for social stability than because they are a source of new productivity and growth. In fact, I think it’s on the agenda of the current government to reform the state-owned enterprises because they’re not very efficient.

How would you define state capitalism?

A narrow definition would be just state-owned enterprises. But I think it’s also a fact that the Chinese government intervenes in the market much more than more marketized economies such as the United States. After the last financial crisis, the government spent a huge amount of money on infrastructure in order to stimulate the economy. You could say that is a species of state capitalism because the state was providing a lot of resources to the private market.

China is undergoing a massive anti-corruption campaign right now. What do you think about its attempt to build a cleaner, more efficient, and even stronger state?

I think that the government is right that corruption is undercutting its legitimacy. It’s very widespread and needs to be combated. What worries me, however, is that it’s not being combated through an impartial judicial process. It’s a matter of political accusations without clear trials and evidence. It produces quick results, but it’s not clear that the results are fair. My concern in the long run is for the sustainability of this campaign.

What I think China needs are institutions to combat corruption. This means a much more independent judiciary and a set of judicial processes that can punish people who break the law.

If corruption is everywhere, does something need to be done in the near term?

I think it’s true that if you make a big push against corruption, politically it brings you support and buys you a certain amount of time. But there’s also a danger. People don’t want to take risks right now because they don’t know what the rules of the game are. They thought they knew, and now a lot of them are being sent to jail or losing their jobs.

I think what’s important is not so much punishing all the bad people of the past, but establishing clear rules about what is acceptable in the future, then setting up institutions that can force people to stick to those rules.

China invented meritocracy. China invented a system in which officials were chosen by civil service examinations. That’s still practiced in China, but it ought to be universal. That ought to be the criteria for rising in the government.

There was corruption in traditional China as well. But the problem with a top-down system is that you can only correct it through more monitoring from the top. There’s a big problem with information. How do you find who’s really corrupt? That’s why I find you need a more bottom-up process.

I think that some political scientists who’ve looked at the relationship between political competition and corruption have found that the more competition you have, the less corruption you have.

State capacity, rule of law, and accountability: Which is most important for China now?

I think that the state has been there for a long time and is plenty powerful. The next item on the agenda is to strengthen rule of law.

Is it a standard process from rule by man, to rule by law, to rule of law, to democracy?

I think that would not be a bad sequence considering where China is right now, if that was indeed the sequence, if it was a serious reform agenda. I think that it’s easier to put in place legal reforms before opening up the political system for political contests. That’s the pattern most European societies went through as well.