Barry Weingast on Violence, Power and a Theory of Nearly Everything 8/13/2007
What this covers
Russ Roberts interviews Barry Weingast, a political scientist at Stanford, about a grand theory of social order built on a single observation: societies are fundamentally mechanisms for controlling violence. Weingast and his collaborators (Doug North and John Wallis) argue that most human societies—"limited access orders" or "natural states"—maintain peace not through democracy or market competition, but by distributing economic rents and privileges to the specialists in violence, giving them a stake in stability rather than conflict. This framework, Weingast suggests, explains why violence makes investment risky and wealth-creation difficult, and why seemingly sensible development advice from rich countries so often fails when transplanted to poor ones.
The conversation ranges across institutional economics, comparative politics, and history to develop this claim. Weingast distinguishes three types of societies: primitive bands, limited access orders (subdivided by fragility), and open access orders like the modern West. He argues that competition and markets—the mainstay of development orthodoxy—can destabilize limited access orders because they threaten the rents that hold the dominant coalition together, making even the exploited defend the system against reform. The discussion includes concrete cases: Mexico's bloated state oil company, where an oversized workforce functions as a private army; Russia's violent banking competition resolved only when oligarchs stabilized their rents; and post-colonial Africa, where superpower Cold War aid removed the pressure to develop institutions. Weingast also traces how Europe's interstate warfare incentivized institutional innovation, and how incremental shifts—from personal privilege to rule of law among elites—can gradually open access without violent collapse. Throughout, the conversation probes a genuine tension: the rents that prevent violence also prevent growth, and the path from one order to another cannot simply leap to Western institutions.
Weingast argues that all societies are fundamentally organized around the problem of controlling violence, and that 'limited access orders' use economic privilege and rents as the glue preventing violence—which is why grafting Western markets and elections onto developing countries fails and can even make everyone worse off.
- Limited access orders distribute rents to specialists in violence so they have a stake in peace, meaning competition threatens the source of stability.
- Even the exploited defend the system because being exploited beats civil war.
- Development must move countries incrementally along stages of natural states rather than expecting a leap to open access.
This asset isn't compiled yet
You're seeing its claims, ranked. Compile it to build the argument threads, weight them, and check each claim against your library — the full view.
Violence makes economic outcomes uncertain and risky, which makes it hard to make investments and achieve high degrees of specialization and exchange, hence reducing the production of wealth; this is why a peaceful exploitative state is an equilibrium worth maintaining.
“in a violent situation it's in flux and there's unknown outcomes are gonna happen and right very risky and therefore it's it's hard to make investments under those situations and so it's hard to you know have great degrees of specialization in exchange and hence the production of wealth”
Even the people being exploited by a limited access order will help defend it against the introduction of competitive markets, because the privileges are the glue holding society together and being exploited is better than being in the midst of violence—so transplanting markets directly can make everyone worse off.
“even the people being exploited by the system are gonna help defend it and the reason is it's better to be exploited than it is to be in the midst of violence”
In natural states no one holds a monopoly on violence; instead violence is distributed among many specialists, so the key to peace is ensuring these specialists in violence don't fight by creating rents that give them a stake in peace.
“there tends not to be in these societies anyone who has a monopoly on violence so there's a district all the distributive access to violence and so part of the key to these societies is ensuring that the different different specialists and violence don't fight”
Economists go wrong by assuming away the problem of violence; once you assume violence away, it looks obvious that allowing more organizations would expand the pie and benefit everyone, but the rents and privileges that limit organizations are precisely the glue keeping society at peace, so there is a genuine trade-off between growth and avoiding violent collapse.
“that's actually a key to where I think the economists go wrong because they The Economist's assume away the problem of violence and if you assume way the problem of violence and you think well well then why isn't it just natural to form organizations”
There are three types of societies ('orders'): the primitive order (small hunter-gatherer bands of 25-200 with little specialization or wealth accumulation), the limited access order or 'natural state' which solves violence through limited access, and the open access order.
“there are three different types of societies which we call orders and the first is the primitive order these are small bands of hunter-gatherer societies they tend to be small 25200”
Limited access orders fail to grow as fast as open access orders because limited access makes it hard for anyone to form organizations, restricting competition and entrepreneurial power and embedding monopoly rents throughout the system.
“it's hard for individuals just anyone to form organizations and so there are limits of competition there's limits on entrepreneurial power and the like and of course there's monopoly rents throughout the system”
Mexico's state oil company Pemex maintains an inefficiently large labor force paid above-competitive wages directly from oil revenues because that labor force also functions as a private army; the government cannot reform it because it is not obvious the government would win an armed conflict against it, so the monopoly persists as a non-violent equilibrium.
“one of the reasons that they have a labor force is this large is it's actually also a private army and so in order to change the rules about the way that this company was governed the government would have to fight this and it's not obvious who would win”
A key 'doorstep condition' enabling incremental movement toward open access is the shift from pure privilege/personal judgment (the King deciding in favor of the more powerful) to rule of law for elites—where different lords can sue one another in courts—because such rules can be incrementally extended to a growing commercial class, making their organizations more efficient and the economy grow.
“moving for from judgment whereby the King decides in favor of who's more powerful to a system of rules and law whereby it's a more judicial or court based system... one of the advantages of this is that... it's possible when you have these kinds of institutions to incrementally increase who has access”
Existing development policy is based on models of the developed world and tries to make developing countries look like developed ones, but because the social dynamics fundamentally differ, practitioners apply tools (e.g., transparency audits) ill-suited to societies that cannot even secure basic physical order and where leadership groups compete through violence and intimidation.
“existing development policy is based on models of the developed world and attempts to make developing countries look more like developed ones unfortunately the social dynamics of developed countries fundamentally differ from those of developing countries”
A key advantage of open access societies is the ability to provide benefits impersonally—by virtue of being a citizen or being in a certain condition (unemployment insurance, poverty relief, health benefits)—whereas natural states distribute benefits through who you know and what patronage system or organization you belong to.
“one of the advantages of open access societies is that they can give benefits in an impersonal way and that is by virtue of being a citizen... most natural states do not have the ability to pursue policies of this kind... instead they're it's who you know what organization what patronage system are you in”
Following Bates, post-WWII African states failed to develop because Cold War superpower competition for clients meant they received immense aid from either bloc regardless of governance, removing the need to husband their economies, and the superpowers funded the UN to police borders and suppress conflicts—thus preventing the very interstate competition that had driven European development.
“if you raise your right hand you get an immense amount of money from them from the West if you raise your left hand you get an immense amount of money... so much so that these countries don't have to husband there are economies... the West has prevented the kind of competition in Africa that was the very kind of competition that allowed it to succeed”
When FDR proposed court-packing in 1937 at the height of New Deal popularity, weekly public opinion polls show no majority ever favored it—even beneficiaries of the New Deal opposed it—demonstrating the consensus condition; whereas in Latin America court-packing tends to get majorities because people want the benefits.
“we happen to have public opinion polls from this era weekly public opinion polls on this and at no moment was there a majority of the country in favor of that... whereas if you go to Latin America... and look at court packing... then you get majorities in favor of it”
Natural states are best understood not as a single dictator controlling access but as a dominant coalition of many specialists in violence and economic activity who respect one another's privileges and thereby prevent violence.
“we think of it more as a dominant coalition there may be a leader and sometimes charismatic leaders are very important for maintaining a coalition but I think the essence of the idea is really about a coalition”
The distribution of rents and privileges must reflect the distribution of access to violence (physical power), because if someone has much greater access to violence than to privileges, they will fight rather than cooperate.
“the distribution of goodies has to reflect the distribution of power that is has to reflect the distribution of access to violence because if somebody has much greater access to violence than they have to rancer privileges then they're gonna fight rather than cooperate”
There are not so much poor countries as poor people in certain countries; elites in limited access orders (North Korea, Argentina) enjoy a modern developed lifestyle—e.g., India has a middle class of ~200 million comparable to the US, but with 600-800 million in poverty.
“there aren't so much poor countries as there are poor people in certain countries who are being exploited so the the elites in those... societies such as North Korea or Argentina have what we would call a modern developed lifestyle”
Buying out the privileged to transition to a more efficient system is very hard because the deal is not credible: once it becomes public, people ask why the privileged should be compensated for losing privileges they shouldn't have had, so the privileged risk losing their rents without compensation—a problem visible in Latin American land grants and US water rights and sugar quotas.
“how do you sustain that deal once that deal becomes public you know the issue is well why why should we buy it... why be by virtue of them being privileged why should we buy them out... so that they Louvre their lose their privileges without being compensated”
Open access orders rest on three pillars: open access to organizations of all types (economic, political, social, religious), rule-of-law institutions and constitutions, and shared beliefs of inclusion and equality before the law.
“there are three pieces the first is of course open access open access to organizations of all types... the second is having a degree of rule of law institutions and constitutions and the third element is beliefs”
Natural states progress through stages distinguished by their organizations: fragile (only the state organization, prone to collapse—Chad, Somalia, Rwanda, Afghanistan), basic (differentiated organizations but all part of the state), and mature (private but elite-based organizations with privilege); effective development helps a country move along this progression rather than leap to open access.
“we differentiate actually three or four different kinds of states one of natural States or limited access orders one is fragile the the next is a basic and the next is immature... in a fragile natural state the only organization is the state”
Following Bob Bates, early modern European states (15th-17th c.) developed better institutions because constant warfare among them rewarded states with superior institutions for husbanding the economy and mobilizing resources—e.g., 18th-century Britain opened up competitive ship victualling, which let its fleet stay at sea longer and bottle up the larger-but-undersupplied French fleet to win the Seven Years' War.
“in the world of early modern Europe in the 15th 16th and 17th century the major European states are fighting each other all the time and this means that states that provide... better institutions both for husbanding the economy and for mobilizing resources are more likely to succeed in that competition”
All organizations and special interests seek privileges and rents in every society including open access ones; the crucial difference is that in open access orders with many competing organizations, granting privileges to a few denies the rest, so excluded groups block special deals (e.g., three transcontinental railroad routes blocking each other before the Civil War) and creating new markets remains unrestricted.
“when you have open access and many organizations that are competing for rents the problem with giving privileges to a small number of them is that all the rest are denied”
Bueno de Mesquita's 'selectorate' theory fits the limited/open access distinction: small selectorates (e.g., a Politburo) lead states to distribute private goods, while large selectorates (all adult citizens) lead to public goods; but his theory takes the state's monopoly on violence and the selectorate size as given, whereas Weingast argues you must explain how states form by how they solve the problem of violence.
“in very small selectorate s-- the country who the state tends to give out private goods where has some very large selector it's it tends to focus on public goods... most models of the state bueno de Mesquita at all in particular think about begin with the state as taking it as given that you have a state it has a monopoly on violence”
The scope of constitutional protection in the US switched in the 1930s: for the first ~150 years the economic clauses (contracts clause, takings clause) were binding constraints and were then swept away, while the equal protection and due process clauses became prominent—so the way the Constitution constrains the economy changed significantly.
“for the first hundred and fifty years the economic clauses of the Constitution such as the contracts clause or the takings clause were significantly binding and those have in the 1930s were were swept away... but the equal protection clause... due process clause have become very important so there's sort of a switch”
In Russia, competition occurs on the basis of violence rather than price and quality—e.g., the banking industry where unstable competing bankers murdered each other until a smaller number of oligarchs emerged who share the rents in a more stable arrangement.
“in the example of the banking industry that the banking industry moved from relatively it's very it was very unstable but lots of different kinds of bankers and and they murdered each other till now there's a much smaller number of oligarchs and they share the rents”
People are far better off being exploited under a peaceful limited access order than living under conditions of civil war, as seen in the collapse of Somalia, Chad, or Rwanda into violence.
“if you think about the falling of Somalia or chat or Rwanda into violence people even people being exploited or far better off under system being exploited than they are under this civil war”
Open access to forming organizations of all types is the crucial feature enabling Schumpeterian creative destruction—where new ideas, products, and organizations out-compete the old (e.g., the automobile replacing the horse and buggy, made by new firms not carriage makers).
“this kind of creative destruction is very important and it's very important for that to work... you have to have a degree of open access to organizations... the fact that anybody can create an organization and produce the next idea”
Limited access orders have per capita incomes roughly between $400 and $8,000-$10,000, with the richest (Mexico, Argentina, Brazil, Russia) at the upper limit; open access orders are above $20,000, creating a large hard-to-bridge gap, with a few transition societies like South Korea in between.
“the richest of the limited access to stores societies are countries like Mexico Argentina Brazil Russia for example they're all around at that upper limit the open access societies which include all the advanced industrial democracies are above twenty thousand per capita”
The early Bush administration steel tariff was dropped largely because of the power of opposing special interests (car and refrigerator makers who use steel), not merely because economists signed a petition or consumers lobbied—illustrating that competing special interests can limit protectionism.
“presumably car makers and refrigerator makers others use steel complain and it has been dropped... it happened because of the the power of special interest on the other side”
The 'tragic brilliance' mechanism distinguishes elections in limited access orders: in open access orders certain goods (water, electricity) are provided to citizens regardless of how they vote, but in Mexico under the PRI, ~80% of local government budgets came from higher governments conditional on the locality voting for the PRI, so they could literally cut your water off for not voting correctly.
“something I call the tragic brilliance mechanism... in Mexico the 80 percent of the historically under the PRI... eighty percent of the lower government's budgets came from higher governments and... getting a budget was dependent upon whether or not the locality cooperated with the PRI”
Since World War Two developed countries have provided on the order of a trillion dollars in aid to the developing world with very little payoff and few success stories; the Southeast Asian Tigers succeeded but not by virtue of the aid—so naive engineering-style optimism about development is misplaced.
“Billy Shirley... who observed that over that since World War two the developed countries have provided on the order of a trillion dollars to the developed world and gotten very little pay off there are very few success stories”
Open access to organizations underpins not only economic competition but a rich civil society—soccer leagues, churches, interest groups, book clubs—and this richness of civil society is a defining feature of open access orders and is suppressed in limited access orders because regimes find people associating to be dangerous.
“a really rich degree of a civil society that is organizations of all types whether they're soccer leagues or civic organizations or churches political organizations of all different kinds”
The 'consensus condition' is that citizens police constitutional rules by acting in concert against violations; when people agree on what the rules are, they can credibly threaten those in power with removal, making the rules defensible—a key difference between open and limited access societies.
“the consensus condition is the idea that one of the ways in which citizens police the constitutional rules is that they're able to act in concert against potential violations and when you act in concert you threaten those in power with being withdrawn for power”
Limited access orders historically describe most states in history, including medieval European states like Tudor England and Carolingian France, and most modern developing countries such as Bolivia, Argentina, India, and Russia.
“most states in history have been limited access orders so you think about in medieval Europe... such as Tudor England or the Carolingian France... we think of most modern developing countries such as Bolivia or Argentina or India Russia”
Britain's 18th-century Parliament represented only about 1 in 10 adult males (no women), but having a representative system allowed incremental expansion of the franchise through the 19th-century reform acts beginning in the 1830s, eventually extending the vote to all adult males.
“the parliament in the 18th century represented the order of you know 1 in 10 120 adult males oh not women... through the various reform acts of the 19th century beginning in the 1830s they they expanded that from a very small portion of British society into all adult males”
The British monarchy evolved into a figurehead role—doing little, having little formal power, but receiving a great deal—which represents an enormously valuable bargain for a society.
“somehow Europe was able to get to a place where the monarch was a figurehead what a great thing even if they're expensive it's a bargain it's a tremendous bargain”
Welcome to EconTalk, part of the Library of Economics and Liberty, hosted by Russ Roberts of George Mason University and Stanford's Hoover Institution.
“welcome to econ talk part of the library of economics and liberty I'm your host Russ Roberts of George Mason University and Stanford University's Hoover Institution”