Dangerous Curve Ahead

Austin American-Statesman, September 24, 2006

James Steinberg, Dean, LBJ School of Public Affairs

During a news conference in July, Secretary of State Condoleezza Rice characterized several recent events—the violence in Iraq, the election of Hamas by Palestinians and the conflict in Lebanon—as "the birth pangs of a new Middle East." The Bush administration's critics, on the other hand, have charged that these crises are the product of a failed strategy of forcing democracy on countries that aren't ready for it. In his new book, "The J Curve," Ian Bremmer tries to help readers navigate such arguments by examining one of the most important policy questions of our time: how to help countries move from closed authoritarian societies to stable market democracies, without triggering the sort of instabilities that threaten our security.

Bremmer, president of the Eurasia Group, "the world's largest political risk consultancy," argues that the way to conceptualize the problem is in the form of a "J curve"—countries on the left side of the "J" are closed and authoritarian, those on the right, open and democratic. Both "sides" produce stability. On the left side, stability comes from repression and control of information (for example, North Korea). On the right, it is preserved by robust political and social institutions that cushion the inevitable shocks (such as the United States and Japan). In between (at the bottom of the curve) are unstable states that can neither maintain order nor cope with crises (Somalia, East Timor). Everyone agrees that the world would benefit if more countries moved to the right of the J curve—the challenge is how to manage the transition.

Bremmer examines representative countries in four groups—highly authoritarian states (North Korea, Cuba, Saddam's Iraq); "left side" states that are more open but resistant to change (Russia, Saudi Arabia, Iran); countries whose founders established them on the "right side" (Turkey, Israel, India); and two that fell into the trough of the J (post-apartheid South Africa, which successfully managed to lift itself out and transition to the right side, and Yugoslavia, which failed to do so). He also provides a rich analysis of the critical and challenging case of China.

This model produces important insights. Bremmer argues persuasively that many policymakers underestimate the stability of authoritarian states such as North Korea and Cuba, even in an age of the Internet and globalization. At the same time, he notes that the left side of the slope is very steep—once an authoritarian state starts to lose its grip, it can quickly slide into instability. Conversely, on the right side, the journey toward stability is slower (think of the United States' century-long trajectory through civil war, women's enfranchisement and the civil rights movement), but the risk of sliding down quickly also much smaller (compare the resilience of France in the face of the 1968 demonstrations with the extremity of China's response to the protests in Tiananmen Square). Prudently, Bremmer argues for a "demand-side" strategy of supporting and encouraging reform from within societies, rather than seeking to impose it from outside.

Implicit is a key insight: Often, the greatest danger is not when autocrats crack down, but rather when they open up, which is why policymakers have been reluctant to push the reform agenda very hard on states such as Saudi Arabia and Egypt, whose short-term stability is important in meeting contemporary challenges. (Here, he effectively uses Russia as a cautionary tale.)

"The J Curve" assembles a powerful case that policies of isolation—especially broad-based sanctions—are rarely effective (though Bremmer acknowledges that South Africa is an exception). In fact, they are often counterproductive because they play into the very strategies that autocrats use to sustain power. Instead, Bremmer would put a premium on building ties, especially through trade and integration into the global economy. This is a powerful argument, but it leads him to make the curious claim that "the introduction into Cuba of large scale oil industry could create a Cuban middle class that demands the right to organize and strike." Bremmer fails to explain why such investments would not simply increase revenues for the regime and thus help it resist demands for reform—or why, under this theory, vast energy revenues have not propelled (and arguably have impeded) reform in energy-rich Saudi Arabia, Central Asia and Russia.

Bremmer recognizes that there are political and economic dimensions to openness, and though he acknowledges that they can never be completely separated, he argues that "political openness is a better guarantor of long-term stability than economic openness." For this reason, he places China on the "left side" of the J curve and India, even under Nehruvian socialism, firmly on the right side. But, somewhat paradoxically, his policy prescriptions favor an approach that begins with promoting economic rather than political reform. For example, he praises America's decision to retain most-favored nation status for China in the 1990s and is silent on whether human rights should figure in the United States' policy on China.

Bremmer's struggle over where to place China on the J curve reflects the limitations of his one-dimensional model. By conflating the economic and political into a single measure of "openness," Bremmer's J curve masks the fact that there are really three types of state in transition: those that are neither politically nor economically open, those that are politically but not economically open, and vice versa. Bremmer argues that China, an example of the latter, is trying, futilely, to "beat the J curve." But the same could be said about India, which is trying to pursue economic reform in a democratic state without triggering a paralyzing backlash from those with a stake in the old system. Bremmer recognizes this risks this entails, but he underestimates the price that India paid for maintaining its statist "license raj" for more than 40 years following independence and why so many developing countries are attracted to the China model.

There are other such lapses in "The J Curve," a reflection, perhaps, of Bremmer's attempt to popularize some very complicated material. (His publisher is clearly hoping that this book will do for international politics what "Freakonomics" did for economics and "The Tipping Point" did for sociology.) Bremmer's analysis, for instance, would have profited from looking closely at South Korea and Taiwan, both of which have made the transition from the left to the right by prioritizing economic reform and deferring political reform until a true middle class emerged. And his discussion of the challenges of globalization fails to look at one of the most important case studies that illustrates these difficulties—the backlash we are now witnessing in much of Latin America, where a fresh look at U.S. policy is desperately overdue.

Still, though the J curve may be too simple a device for analyzing all of today's geopolitical problems, it is certainly a thought-provoking way to frame the discussion. And compared with the overheated claims and ambitions of recent policy, Bremmer offers a welcome return to strategies that may lack rhetorical pizzazz, but offer a more sustainable path for the future.

James B. Steinberg is dean of the Lyndon B. Johnson School of Public Affairs and served as deputy national security adviser to President Clinton.