Reuters
Chrystia Freeland
Chrystia Freeland
Predicting the next uprising
Excerpts:
there is something very familiar about this failure of the experts. There seems to be something about swift, massive paradigm shifts — whether they are the bursting of a financial bubble that has been years in the making, or a popular revolt against a political regime that had been stable for decades — that we find hard to anticipate.
Research by behavioral economists like Dan Ariely of Duke University has suggested that part of the problem may be that when we have a vested interest in the status quo our brains are wired to view it as good and stable. Dr. Ariely’s work has focused on the cognitive blinders our financial self-interest imposes. But a similar bias may shape the views of political experts, who can end up developing a sense of ‘‘ownership’’ of the national elites they study that seems to be nearly as powerful as the proprietary feeling bankers had for the credit derivatives they created.
Research by behavioral economists like Dan Ariely of Duke University has suggested that part of the problem may be that when we have a vested interest in the status quo our brains are wired to view it as good and stable. Dr. Ariely’s work has focused on the cognitive blinders our financial self-interest imposes. But a similar bias may shape the views of political experts, who can end up developing a sense of ‘‘ownership’’ of the national elites they study that seems to be nearly as powerful as the proprietary feeling bankers had for the credit derivatives they created.
... even if we are able to overcome our psychological resistance to the very notion of regime change, anticipating precisely when dictators will be toppled may not be possible. ‘‘By their very nature, these tipping points are not predictable,’’
Peter Rudegeair and I have done a back-of- the-envelope calculation to identify countries with a high latent potential for uprisings. We considered four factors — [1] political freedom (on the grounds that democracies don’t usually require popular rebellions to achieve regime change), [2] corruption, [3] vulnerability to food price shocks and [4] Internet penetration. Our spreadsheet used publicly available measures of the four factors and came up with a list of 25 most vulnerable countries.* You can see the spreadsheet explaining the publicly available measures of the four factors we used and the top 25 countries we came up with here. Libya, Algeria and Egypt made it into the top 10. Perhaps more surprisingly, so did Russia, Uzbekistan, Azerbaijan and Venezuela.
... another contributor to regime fragility that it would be worth factoring in to a more sophisticated analysis (you can try this at home!) is whether the authoritarian government is itself the product of recent revolutionary struggle. Dictatorships run by an ideologically united revolutionary party — Iran, for instance, and to a lesser extent China — are, Dr. Way argued, more durable than those whose rulers rely purely on guns and patronage.
Food-price shocks are often the catalyst that tips a regime with a latent vulnerability to an uprising into one facing people in the streets: that was the case in Tunisia, and has been true as far back as the Bolshevik Revolution. Something else that can propel a society with a latent potential for rebellion into action is the demonstration effect, or what Dr. Acemoglu calls ‘‘contagion,’’ a phenomenon also familiar to anyone who was caught in the wildfire global spread of the financial crisis in 2008.
In both cases, the sudden belief that a previously stable status quo could change had the power to alter reality. This interplay between perception and fact is what George Soros, an expert in paradigm shifts in both markets and countries, calls reflexivity.
Update: For ease and simplicity, we used Nomura’s Food Vulnerability Index to calculate how rising food prices would affect a country’s domestic economy. Because Nomura limited their Food Vulnerability Index to 80 countries, our uprising index is also limited to 80 countries. This explains why some countries that seem like they would be prime candidates for having a high latent potential for rebellion — like Iran, Cuba, and Jordan — do not make our list.
Access Content Source And Other Great Stuff: http://blogs.reuters.com/chrystia-freeland/2011/02/24/predicting-the-next-uprising/
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http://dreamlearndobecome.blogspot.com This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.
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