It is relatively common in sub-Saharan Africa and other poor countries for fishermen to
refuse to use a new net technology that is offered to them for free and for farmers to refuse
to make the necessary investments in new farming technology. Research by Francisco M.
Gonzalez, published in the July 2005 Economic Journal, explains these deliberate choices
of technological backwardness as a way to prevent conflict in economies that lack publicly
enforced property rights. Poverty, it seems, may be the price of peace.
Why does the absence of well-functioning institutions of private property cause
technological backwardness?, Professor Gonzalez asks. A traditional view is that insecure
property discourages innovation and investment, much like a tax.
But this cannot explain why many countries are so far behind the technological frontier,
even though superior technologies are readily available at seemingly negligible costs of
adoption. Whether tax is imposed by government officials, rackets or other private
individuals, they rarely demand 100% of one's profit, because outright expropriation kills the
incentive to create wealth.
But then economic stagnation or decline, and even slow growth, are difficult to understand,
unless the use of superior technologies is taxed at a higher rate. So still the question is
why? A second explanation is that interest groups with a vested interest in the status quo
tend to block the adoption of superior competing technologies by others.
But the issue is whether this can explain systematic technological backwardness at the
level of a province, a country… or even a continent. In particular, if certain interest groups
have the political power to block technology adoption, and if technological progress is so
profitable, then why don't they adopt superior technologies themselves, or tax those who do
so after the fact?
Gonzalez argues that technological backwardness may be deliberately chosen to forestall
costly conflict over economic distribution in economies that lack publicly enforced property
rights. The reason is that choosing to adopt a superior technology confers a strategic
disadvantage in the subsequent distribution of wealth.
By becoming entrepreneurs, people gain a relative advantage in the creation of wealth. But
in the absence of a well-functioning system of property rights, such people must privately
enforce their claims to the wealth they have created.
In such a world, it pays to specialise in activities aimed at redistributing, rather than
producing, resources. In other words, it pays to gain a relative advantage in appropriation of
others' wealth and a relative disadvantage in the creation of wealth that can be
appropriated by others.
In such a context, if you are asked about your lack of productivity, the answer is simple:
choosing to be unproductive is a strategic commitment to forestall conflict. For if you were
more productive than others, then the cost that you would bear in the conflict to secure
some wealth for yourself would be so much higher that you would be worse off.
On the flip side, often the most violent conflict is driven by the prospect of booty. One
simply needs to look at the infamous diamond wars. Of course, violent conflict is horrifying
and extremely costly. But it is important to understand that the absence of conflict does not
imply that the problem is absent. Rather it may simply reflect the fact that poverty is the
price of peace.
Solving this problem demands developing the appropriate institutions of private property.
Recognising this is the first step towards fighting conflict as well as poverty.
ENDS
Notes for editors: ‘Insecure Property and Technological Backwardness’ by Francisco M.
Gonzalez is published in the July 2005 issue of the Economic Journal.
The author is at the University of Calgary.
For further information: contact Francisco Gonzalez on +1-403-220-6709 (email:
francisco.gonzalez@ucalgary.ca); or RES Media Consultant Romesh Vaitilingam on 0117-
983-9770 or 07768-661095 (email: romesh@compuserve.com).