Corruption and Afghanistan: Do we really understand what is going on and why?

I've been reading a book by an economic
historian that made me think of the anti-corruption campaign in Afghanistan in
a different way.

The book is Douglas Allen's The Institutional Revolution.
I picked it up because I was so taken by his discussion in an academic article
about the organization of command and control in
the Royal Navy during the age of fighting sail.

In this book, Allen, looking at the roots of
the industrial revolution, argues that the more a society is subject to the
whims of nature (drought, flood, wind, and such), the more likely it will
appear to modern man to be corrupt. The last sentence in the book is, "What on
the surface seem to be archaic, inefficient institutions created by people who
just did not know any better, turn out to be ingenious solutions to the
measurement problems of the day."

What we call "corruption" is basically the way
the world worked before 1860, and much of the world still does today. Indeed,
he argues that the British empire was built on a complex web of bribes,
kickbacks, and what economists call "hostage capital."

"Institutions are chosen and designed to
maximize the wealth of those involved, taking into account the subsequent
transaction costs," Allen writes. "The institutions that survive are the ones
that maximize net wealth over the long haul."

I think Allen focuses a bit too much on
standardization and measurement as driving forces in the changes in 19th century institutions, such as public policing. For example, my experience of
theft in small towns is that people often know who does it, and handle it
quietly and privately, while in big cities, they have no idea who the criminals
are. Hence the need for public police forces in 19th century England
as there was a massive movement of people from the countryside to the cities.

Allen also changed the way I understand
aristocracy. He argues, persuasively, that the role of aristocracy was to
provide loyal, competent, honest service to the crown. Thus their wealth had to
be in land that could be confiscated. An aristo who invested in industry was no
longer hostage to the crown, and so could no longer be trusted entirely. Hence
the creation of strong disincentives to pursuing other forms of wealth, one
reason that the ruling class in England tended to sit out the Industrial
Revolution.

Overall, a really interesting book, full of
thought-provoking facts and assertions.