The People's Sovereignty

How a new twist on an old idea can protect the world's most vulnerable populations.

Sovereignty is an anachronistic concept originating in bygone times when society consisted of rulers and subjects, not citizens. It became the cornerstone of international relations with the Treaty of Westphalia in 1648. During the French Revolution, the king was overthrown and the people assumed sovereignty. But a nationalist concept of sovereignty soon superseded the dynastic version. Today, though not all nation-states are democratically accountable to their citizens, the principle of sovereignty stands in the way of outside intervention in the internal affairs of nation-states.

But true sovereignty belongs to the people, who in turn delegate it to their governments. If governments abuse the authority entrusted to them and citizens have no opportunity to correct such abuses, outside interference is justified. By specifying that sovereignty is based on the people, the international community can penetrate nation-states' borders to protect the rights of citizens. In particular, the principle of the people's sovereignty can help solve two modern challenges: the obstacles to delivering aid effectively to sovereign states, and the obstacles to global collective action dealing with states experiencing internal conflict.

External aid does not necessarily interfere with the sovereignty of states; governments can take aid or leave it. Having spent nearly $5 billion in such assistance over the years, I have experienced all the pitfalls that beset foreign aid. In 1984, I established the first national foundation inside Communist Hungary, followed by national foundations in some 32 additional nations. These foundations have been operating with total annual budgets averaging around $450 million for the last decade.

Although offers of external assistance do not undermine state sovereignty, foreign aid should not flow through national governments alone but should also support local governments and nongovernmental organizations (NGOs). Democratic governments should not object to aid directed at such groups. But precisely those governments that do not qualify for official assistance tend to oppose these nongovernmental channels. Such objections make a prima facie case that those regimes are violating the people's sovereignty; thus, the case for supporting civil society grows even stronger.

That principle has guided my network of foundations. In every country, we create a local board of citizens and channel our support through it. These boards work with the government when possible; where they cannot, they confine their support to civil society and resist state interference. So far, the foundations have successfully fought repression because governments are loath to publicly crack down on organizations that serve the interests of the people. Consider what happened in Yugoslavia toward the end of the Slobodan Milosevic era: Despite outlawing my foundation, Belgrade never enforced the decision, which allowed the foundation to continue operating.

Outside governments and international aid organizations are in a much stronger position than private foundations to resist governmental meddling in assistance directed to ngos. Even the most repressive regimes seek to maintain the fiction that they have the people's interest at heart, leaving themselves susceptible to diplomatic disapproval. Although external pressure can be counterproductive -- the land issue in Zimbabwe touched a nerve with the African public, and Zimbabwean President Robert Mugabe deflected widespread international disapproval by posing as a warrior against colonial oppression -- a suitable pressure point can often be found. For instance, when Egyptian authorities jailed democracy activist Saad Eddin Ibrahim in 2000 for, among other charges, accepting unauthorized foreign financial support, the United States retaliated by freezing a supplemental aid package to the country. The Egyptian Court of Cessation eventually acquitted Ibrahim in March 2003, reaffirming freedom of speech and freedom to receive funds from abroad.

Since armed conflicts and repressive regimes may pose dangers beyond the borders of the countries concerned, all democratic nations have an interest in overcoming collective action problems and promoting open societies all over the world. The earlier preventive action begins, the less costly and more effective it is likely to be. For example, in the former Yugoslavia, early outside pressure on Milosevic -- either when he abolished the autonomy of Kosovo in 1990 or when the Yugoslav navy bombarded Dubrovnik a year later -- could have averted the tragedies that befell the region over the next decade.

The Baltic states, particularly Latvia and Estonia, provide a positive example of conflict prevention. These states were forcibly integrated into the Soviet Union in 1940; much of the local population was deported and other nationalities brought in. When the Baltics regained their independence in 1991, they struggled with a strong impulse to deny citizenship rights to members of these other nationalities. Such mistreatment of the sizeable Russian populations within these countries could have provided Russia with a compelling excuse for armed intervention, but the Organization for Security and Co-operation in Europe (OSCE) and the European Union pressured the Baltic states to guarantee minorities legal rights and protections. My foundations (among others) provided language instruction and supported other forms of ethnic reconciliation. A potential crisis was defused.

Unfortunately, though, a non-crisis makes no headlines. As things stand now, conditions must deteriorate significantly before foreign governments are willing to take a firm stand. But by the time gruesome television images provoke outrage in Western audiences, it will be too late to prevent a crisis. And as crises multiply, the public becomes less responsive, allowing dangerous situations to fester. The tardy U.S. intervention in Liberia is typical.

Of course, predicting which grievances will develop into bloodshed is impossible; the most effective preventive action reduces the potential for crises to develop in the first place. The best way to accomplish this goal is by fostering open, democratic societies. That has been the objective of my foundations since before the disintegration of the Soviet empire. It must be pursued on a larger scale.

That pursuit brings us back to a reconsideration of the principle of sovereignty. As U.N. Secretary-General Kofi Annan has stated, "state sovereignty, in its most basic sense, is being redefined -- not least by the forces of globalisation and international co-operation. States are…instruments at the service of their peoples, and not vice versa." Indeed, the rulers of a sovereign state have a responsibility to protect the state's citizens. When they fail to do so, the responsibility is transferred to the international community. Global attention is often the only lifeline available to the oppressed.


A Development Nightmare

What if poor nations actually caught up with rich ones?

Indulge in a dream scenario for a moment: Suppose the world awoke tomorrow and, miraculously, every country suddenly enjoyed the same per capita income as the United States, or roughly $40,000 per year. Global annual income would soar to $300 trillion, or some 10 times what it is now. And while we're at it, suppose also that international education levels, infant mortality rates, and life expectancies all converged to the levels in rich countries. In short, what if foreign aid worked and economic development happened overnight instead of over centuries?

A heretical thought, perhaps. But I wonder sometimes what voters in rich nations must be thinking when they reward their politicians for cutting already pathetic foreign-aid budgets. Is it possible that, deep down, the world's wealthy fear what will happen if the developing countries really did catch up, and if the advantages their own children enjoy were shared by all? Would the dream become a nightmare?

Consider whether today's wealthy would materially suffer under such a scenario. As things now stand, 290 million U.S. citizens already cause almost one fourth of world carbon dioxide emissions. What if 1.3 billion Chinese and 1.1 billion Indians suddenly all had cars and began churning out automobile exhaust at prodigious U.S. rates? While the sun might not turn black and the ozone layer might not vaporize overnight, the environmental possibilities are frightening. And what of the price of oil, which is already notoriously sensitive to small imbalances in demand and supply? Absent huge new discoveries or brilliant new inventions, oil could easily reach $200 per barrel, as consumption and depletion rates accelerate. The mighty U.S. dollar would become a boutique currency and the euro experiment a sideshow. Investors would clamor for Chinese yuan and Indian rupees. The world's youth would grow up thinking that "Hollywood" must be a wordplay on "Bollywood," and McDonald's hamburgers would be viewed a minor ethnic cuisine. And a country such as Canada would suddenly have the economic heft of Luxembourg, with much of its population reduced to serving once poor, now rich, international tourists.

Let's face it: The rich countries would no longer feel rich. Humans are social creatures; once we clear the hurdle of basic subsistence, wealth becomes a relative state of being. Even an optimist such as myself must concede that a world of equality between rich and poor nations would be shockingly different -- and that is even disregarding the impact on global power politics. Still, such rapid economic development offers a clear upside for today's rich countries. Greater diversity and knowledge spillovers can breed much faster productivity growth, the ultimate source of wealth for everyone. Once properly educated, fed, and plugged in, inventive geniuses from South Asia and Africa might speed the development of clean and safe hydrogen power by two generations. And whereas commercial medical researchers might start spending more energy combating tropical diseases, now privileged citizens in temperate climates would still enjoy countless technological spin-offs. Indeed, such gains of rapid economic development could fully offset the losses to the rich.

By highlighting latent insecurities in rich countries, I certainly do not mean to endorse or stoke them. But these underlying fears must be addressed. If globalization really works, then what is the endgame? What kind of political institutions are necessary to prepare -- socially as well as psychologically -- for success? It is easy for everyone to endorse the United Nations Millennium Development Goals (MDG), which aim to satisfy basic human needs by 2015. (Unfortunately, the specific objectives are so limited that MDG ought to stand for the Minimum Development Goals.) But how far are rich nations willing to take development? How much are we prepared to give?

Of course, no one has developed a magic formula for how to make countries grow, though economic researchers have identified a number of poisons. Corruption, overweening government intervention, and mountains of debt are contraindicated for countries attempting to develop (which is one reason most foreign aid should be recast as outright grants instead of loans). Though critics are correct to argue that foreign aid stymies growth by breeding corruption and stifling private enterprise, the empirical evidence suggests that aid can be productive when it supports good policies. Does trade help countries grow? Again, my read of the evidence says yes: If Europe and Japan gave up their outrageous farm protection and if the United States stopped competing with India for the title of anti-dumping champion of the world, poor countries would gain far more than if their aid inflows suddenly doubled. And, by the way, if poor countries gave up their own trade protectionism, their citizens would benefit by even more.

Even so, rich countries could easily afford to triple their aid budgets without running the remotest risk of the "nightmare" scenario coming true. They could channel money into health in Africa, into education, and into infrastructure and other necessities with little danger of any rapid catch-up. (Though why the World Bank still lends to China, with more than $350 billion in hard currency reserves and a space program to boot, is difficult to explain.) Gallons of aid money, such as what Northern Italy has poured into Southern Italy for almost 60 years, help assuage development's growing pains, but progress rarely occurs quickly. Growth economics suggests that poor regions have a hard time closing the income gap on rich countries at a rate greater than 2 percent per year, even under the best of circumstances. Catch-up -- when it happens at all -- takes generations.

Rich countries need not be ambivalent or stingy. Certainly, if sudden and rapid economic development were possible and actually materialized, many citizens in wealthy nations would feel jarred, even threatened. And some day, world income distribution will be radically different than it is today, but not anytime soon. Nightmare scenarios and fear of success need never stand in the way of sensible -- and generous -- development policies.