We know how to transfer resources across international borders, but well-functioning public institutions require certain habits of mind and operate in complex ways that resist being moved.
At issue is whether the institutions and values of the liberal West are indeed universal, or whether they represent merely the outgrowth of cultural habits of a certain part of the northern European world. The fact that Western governments and multilateral development agencies have not been able to provide much in terms of useful advice or help to developing countries undercuts the higher ends they seek to foster.
It is safe to say that politics in the 20th century were heavily shaped by controversies over the appropriate size and strength of the state. The century began with a liberal world order presided over by the world’s leading liberal state, Great Britain. The scope of state activity was not terribly broad in Britain or any of the other leading European powers, outside of the military realm, and in the US, it was even narrower. There were no income taxes, poverty programs, or food safety regulations. As the century proceeded through war, revolution, depression, and war again, that liberal world order crumbled, and the minimalist liberal state was replaced throughout much of the world by a much more highly centralized and active one.
On the other hand, there is another sense in which the American state is very strong. Max Weber defined the state as “a human community that [successfully] claims the monopoly of the legitimate use of physical force within a given territory.” The essence of stateness, in other words, enforcement: the ultimate ability to send someone with a uniform and a gun to force people to comply with state’s laws. In this respect, the American state is extraordinarily strong: It has a plethora of enforcement agencies at federal, state, and local levels to enforce everything from traffic rules to commercial law to fundamental breaches of the Bill of Rights.
The US, in other words, has a system of limited government that has historically restricted the scope of state activity. Within that scope, its ability to create and enforce laws and policies is very strong.
But the American rule of law is the envy of much of the rest of the world: Those American who complain about how their local department of motor vehicles treats motorists should try getting a driver’s license or dealing with traffic violation in Mexico City or Jakarta.
In Kenya, for example, the employees of the office of the president grew from 18,213 in 1971 to 43,230 in 1990. No international lender or bilateral donor at any time wanted this outcome, yet none were able to structure their conditionality in a way to prevent it from happening because of their inability to control local political outcomes.
The financial crises experienced by Thailand and South Korea were both directly linked to premature capital account liberalization in the absence of adequate regulatory institutions that could oversee domestic banking sectors that were suddenly flooded with enormous amounts of foreign short-term capital. It is clear in retrospect that under these circumstances, a little liberalization can be more dangerous than no liberalization at all. South Korea, for example, liberalized its capital account as a condition for entry into the OECD without a corresponding opening of its equity markets or greater FDI. As a result, foreign investors who wanted to get a piece of the Korean economic miracle had their money on short-term accounts that could be withdrawn at the first sign of trouble. When South Korea’s current account began to deteriorate in then 1996-97, the currency came under irresistible pressure as short-term capital was withdrawn. This situation set the state for the economic crisis of late 1997.
The concern over state strength, which goes under a variety of headings including “governance,” “state capacity,” or “institutional quality,” has always been around under different titles in development economics.
Before the 1980s it was common to assert that institutions didn’t matter or were themselves determined by the economic and social “substructure.” Institutionalism has made something of a comeback in recent years, however, within the subfield of comparative politics, with numerous studies of the consequences for economic growth of parliamentary versus presidential systems, various types of electoral systems, federalism, party systems, and so forth.
In areas like monetary policy, the goal of policy are relatively straightforward (that is price stability) and can be met by relatively detached technocrats. Hence central banks are constructed in ways that deliberately shield them from short-term democratic political pressure. In other sectors like primary and secondary education, the quality of the public agency’s output greatly depends on the feedback it receives from the ultimate consumers of government services. It is hard to imagine technocrats working in isolation from the people they serve doing a good job in these areas. Hence democracy, apart from its legitimating value, has a functional role in governance as well.
There was a period in which various authors argued in favor of an authoritarian transition, a view which still finds some favor in East Asia, where it has work relatively well. Many political economists assume that economic reform require austerity, job cuts, and other types of short-term dislocations and therefore generates political opposition and backlash. Reform is thus better undertaken by authoritarian regimes that can suppress societal demands, or else by a technocratic elite that is somehow isolated or buffered from political pressures.
Authoritarian countries, however, have long-term problems with legitimacy. Many have sought to legitimize themselves through their ability to deliver on growth, but when growth ceases or turns into decline (as was the case for Suharto’s Indonesia in 1997-98), legitimacy disappears and instability ensures. Democratic countries are often better able to survive economic setbacks because their legitimacy comes from democracy itself (e.g., South Korea in 1997-98). At the same time, there have been significant examples of democratic countries like Poland or New Zealand making hard economic reform choices.
A joke told by economists has an economist and a student walking down the street when the student sees a hundred-dollar bill lying on the sidewalk in front of them. The student moves to pick it up, but the economist explains that the bill cannot possibly be there, because if it were, someone would have picked it up already. Economists tend to believe, in other words, that if an incentives exists, it will automatically motivate behavior. The reality is that good economic institutions do not always generate their own demand. Even if the society as a whole is better off with good institutions, every new institutional arrangement produces winners and losers, and the latter can be depended on to protect their relative positions. In other cases, the problem may be cognitive: The society may not understand the relative efficiency or inefficiency of alternative institutions. This is the equivalent of not noticing the hundred dollar bill lying on the street.
Even if conditionality could be enforced firmly, it is not clear that it would bring about serious reform. Holding on to a certain structure of political power is often a life-and-death issue for leaders or poor countries, and no degree of external public-goods financing from the donor community will be sufficient to offset losses of power and prestige that will accompany true reform.
The other external source for creating demand for institutions is the political power exercised directly by countries or consortia of countries as occupation authorities or through a strong direct relationship with the local government. This is what we label “nation-building.” An occupation authority obviously has much more direct leverage over the local country than does an external lender or aid agency working through conditionality. On the other hand, most nation-builders soon find that their ability to shape the local society is very limited as well. Moreover, most countries in need of nation-building are failed states or other types of post-conflict societies with far more severe governance problems than the average recipient of a conditional loan.
The US is sometimes credited with successful nation-building in postwar Germany and Japan, where it was an occupying power. In terms of the administrative capacity that is the subject of this book, it is clear that nothing of the sort happened. Both Germany and Japan were both very strong bureaucratic states long before the US defeated them; indeed, it was the strength of their states that led them to the great powers and threats to the international system in the first place. In both countries, the state apparatus survived the war and was preserved into the postwar period with remarkably little change. What the US did successfully was change the basis of legitimation in both cases from authoritarianism to democracy and to purge members of the old regime that had started the war. The American occupation seriously underestimated the competence and cohesiveness of the Japanese bureaucracy and did little more than a change of a few positions at the top.
True emphasis on capacity-building is another form of “tough-love” that, like conditionality, is very hard for well-intentioned people to actually carry out. So what we get in the meantime is lip service to the importance of capacity-building and the continued displacement of institutional capacity by outside donors.
Of the different types of knowledge about institutions, that concerning the design and management of organizations was the most susceptible to formalization and hence to transferability across societal or cultural boundaries. In this chapter I argue that even within the limited domain of organizations, there is no optimal form of organization, both in the private sector and for the public sector agencies. That there are no globally valid rules for organizational design means that the field of public administration is necessarily more of an art than a science. Most good solutions to public administration problems, while having certain common features of institutional design, will not be clear-cut “best practices” because they will have to incorporate a great deal of context-specific information. This in turn has important policy implications and how we train practitioners in this field. Good solutions to public administration problems have to be, in some sense, local, which requires a very different relationship between governments in developing countries and their outside donors and advisors.
For all of its richness and complexity, a huge amount of organizational theory revolves around a single, central problem: that of delegated discretion. The conundrum of organizational theory is that while efficiency requires the delegation of discretion in decision making and authority, the very act of delegation creates problems of control and supervision.
The costs of finding information about products and suppliers, negotiating contracts, monitoring performance, and litigating and enforcing contracts in decentralized markets often meant that it was more efficient to bring all of these activities within the boundaries of a single hierarchical organization that could make decisions on the basis of an authority relationship.
According to Williamson, bounded rationality meant that parties to a contract could never fully anticipate all possible future contingencies and enact formal safeguards against possible forms of opportunism. Open-ended employment contracts and authority relationships permitted more flexible adjustment to unforeseen future states of the world. In addition, market efficiency rests on the existence of a large number of market participants in competition with one another. But large numbers tend to turn into small numbers in many specialized contracting situations, allowing contractors to take advantage of asymmetric information. Again, the solution was to bring these activities within the boundaries of the hierarchy through vertical integration.
Berle and Means [1932] recognized long ago that the divorce of ownership from management in modern corporations creates significant corporate governance problems. The owners, or principals, designate managers, or agents, to look after their interests, but the agents often respond to individual incentives that differ sharply from those of the principals. This is a problem with all forms of hierarchical organization and can exist at multiple levels of the hierarchy simultaneously.
In the private sector, the principals are the shareholders; corporate boards of directors are their agents, and members of senior management serve as agents of the boards. In the public sector, the principals are the public at large. In a democracy their first-level agents are their elected representatives; the legislators act as principals with regard to the executive branch agents delegated to carry out the policies they have legislated. Political corruption occurs when individual agents — government officials — put their own private pecuniary interests ahead of those of their principals. But agents can act contrary to principal wishes for other reasons as well, such as the desire to preserve their agencies and job security or from ideological motivations that differ with those for whom they nominally work.
Another major branch of contemporary economics, public choice theory, begins with the assumption that agents in public sector organizations will have very different agendas from those of their principals. Public servants are no different from any other economic agent in seeking to maximize their individual self-interest. Rhetoric about “public service” implies that government officials will somehow be oriented toward acting in the broad public interest when in fact their behavior is better explained empirically by narrower self-interested motives. The behavior of public officials can be influenced by bribes, campaign contributions, payoffs to family members, or promises of future employment. A great deal of private sector activity thus gets diverted from wealth-producing entrepreneurship to rent-seeking. The public choice perspective is ultimately pessimistic about the prospects for reshaping the motivations of government officials through norms.
A great deal of the work now being done to improve governance is those attempting to better align agent incentives with the interests of the principals. The general approach to aligning principal and agent interests is to promote greater transparency in the activities of the agents is to promote greater transparency in the activities of the agents (a nice way of describing the monitoring of their behavior) and then to hold the agents accountable for their actions through the use of rewards and punishments. Much of the work of the public choice school is to devise constitutional and legal arrangements that minimize rent-seeking and other kinds of agency costs. Another approach — more workable in the private sector than for public agencies — is to reunite owners and managers by giving the agents stock options or other forms of equity ownership.
Economic theories about organizations, like economic theories more generally, begin from a premise of methodological individualism. That is, organizations are fundamentally understood as a collection of individuals who learn to cooperate socially for reasons of individual self-interest. This perspective thus tends to emphasize conflicts of interests between members of the group (that is after all what principal-agent problems are all about) and to underplay concepts like group identity, socialization, leadership, and so forth.
It is certainly worthwhile to try to understand the problems of corporate governance or public corruption in principal-agent terms and to use this framework to design institutions that try to bring divergent incentives back into alignment. However, there are at least three basic reasons why there can be no optimal specification of formal institutions and thus no optimal form of organization, particularly for public sector agencies.
First, the goals of many organizations are unclear. Agents can carry out the will of principals only if the principals know what they want the agents to do, but this is not always the case. Goals often emerge and evolve through complicated interactions between organizational players or are defined by the roles assigned to players in the organization — the so-called where you sit is where you stand rule. Labor can be divided functionally in a variety of ways that necessarily favor one organizational goal over another but never all simultaneously.
Second, formal systems of monitoring and accountability, particularly in public administration, either entail very high transaction costs or are simply impossible because of the lack of specificity of the underlying activity. In these cases it is often more efficient to control agent behavior through informal norms, but control of agent behavior through norms has its drawbacks as well. An organization’s choice of formal or informal control mechanisms will depend on the particular circumstances it faces.
Third, the appropriate degree of delegated discretion will vary according to the endogenous and exogenous conditions that an organization faces over time. All delegation involves a tradeoff between efficiency and risk, and both the degree of risk and the appropriate level of delegation are often difficult for organizations to determine. The result is that the same degree of delegation will work in one setting and not another or in one time period and not another.
Individuals learn, but organizations also learn in ways that are different from the sum total of individual learning: They have their own myths, histories, and traditions that shape individual perception. This view of knowledge as socially embedded anticipates in many ways newer studies about the effects of networks on organizational learning.
Specialization and the division of labor require that members of the organization defer not just to sources of authority higher than themselves in the hierarchy but also to the authority of possessors of these specialized forms of knowledge. Indeed, many organizations have formal rules requiring deference to certain specialists: A CEO cannot simply overrule the authority of the accounting department and demand that an expense be classified in a certain way. The complex structure of authority within an organization thus explains why they are frequently so conservative, hard to move, and indeed “bureaucratic.”
A significant proportion of the conflicts and dysfunction that exist in organizations concern precisely this kind of disagreement over authority or, as it is more commonly termed, “turf.”
Which agent’s interests are misaligned with those of the principals? Perhaps it is the teachers, who want to protect their jobs and privileges, but maybe it is the administrator, who wants to get his unqualified brother hired as a teacher.
Disagreements often reflect genuine cognitive uncertainties over what constitutes the best interests of the principals. Today, highly trained pilots of combat aircraft argue that too much emphasis on RPVs will lead to a deterioration of pilot skills that will be critical in future wars. They are certainly promoting their interests by making this case, but for all we know today, they might be right about the nature of the future wars.
Monitoring agent behavior and holding agents accountable is particularly difficult in the public sector. Public sector organizations produce primarily services, and service sector productivity is inherently hard to measure. The problem of monitoring and accountability is bad enough in private sector organizations, where there are at least profitability benchmarks for measuring output, but it becomes virtually impossible to solve for many types of public sector outputs.
Discretionary refers to a decision that requires a judgment of imperfect or incomplete information by a skilled decision maker, as opposed to one that can be routinized. Central banking, by this measure, is highly discretionary; retail commercial banking is not.
Educational outputs are hard to measure, and it is virtually impossible to hold individual teachers accountable.
Lawyers, doctors, architects, and other professionals all produce services that in many respects are of relatively low specificity. The principals who hire professionals as agents, for example, can usually detect instances of gross incompetence or fraud, but they have little way of judging the final quality of their agent’s output relative to the other possible outputs. An architect designs what looks like an acceptable house, but are there more creative variants she should have come up with that would have been more pleasing? Could she have done the same work in less time?
The fact that a rule is internalized rather than being applied externally does not, of course, necessarily mean that it will be more strictly followed, or that shirking or opportunism aren’t serious problems with norms. Informal norms work best when they supplement rather than replace formal incentive structures. Compliance with informal rules also needs to be monitored and failure to abide by them sanctioned. Informal norms have their own mechanisms for monitoring and enforcement, however, that can often be more subtle and flexible than formal mechanisms. Hidden action among members of a team may be hard for a supervisor to monitor, but it is not hidden to the team members themselves who have mechanisms like shaming and ostracism to keep shirkers in line.
The most extreme example of how public agencies can make use of norms and social capital is in military organizations. It is safe to say that normal individual economic incentives cannot motivate people to risk their lives in combat. Military organizations solve this problems not by increasing individual incentives but by replacing individual identities with group identities and reinforcing group identities through tradition, ceremony, and group experiences that are meant to bond soldiers emotionally. In the US Marine Corps basic training, trainees are not even allowed to refer to themselves by their given names, but simply accept the name “marine”. The strongest bonds are not to large organizations or abstract causes like the nation; rather they are to the immediate group of soldiers in one’s platoon or squad, before whom one would be ashamed to be a coward. Only through the repeated reinforcement of these group ties can individuals be made to overcome their natural fear of death.
Modern constitutional government and the rule of law were established deliberately to limit discretion in the exercise of state power, as indicated by the phrase “government by laws and not by men” commonly attributed to Aristotle. But the rule of law by itself is not sufficient to achieve effective government; effective government requires discretion or, in the words of the Federalist papers, “energy in the executive.” Hence rule-of-law states seek to reinsert carefully circumscribed domains of discretion back into executive power, particularly in areas like military command or monetary policy that combine technical expertise with the need for decisive action. The truth is that discretion is a necessary condition for the exercise of any type of authority and exists to some degree at virtually all levels of public administration.
The degree of discretion that an organization grants to a subordinate division, branch, office, or individual is among the most important institutional design decisions that can be made. The most effective organizations are inevitably those run by highly capable individuals who are granted a large amount of discretion and who face relatively few formal institutional controls. Good judgment is something that cannot be formalized, because it depends on weighing complex contextual factors against a background of experience that provides generalized models of human behavior. Economists refer to tacit knowledge that cannot be learned from a book but arises instead from a worker’s active interaction with a piece of equipment. Such knowledge exists well beyond the factory floor and is part of the repertoire of capable presidents, program managers, CEOs, and administrators.
The reason that government procurement, for example, ends up being so costly relative to the private sector procurement is that the public sector principals are willing to tolerate only minuscule degrees of risk in their delegation of authority. Fear that undue discretion will lead to corruption or abuse drives the proliferation of formal procurement rules limiting discretion, without regard to the agency costs of such risk-averse policies. In addition, they load the decision process with other objectives like racial and gender equality or the promotion of small business, in ways that further constrain discretion.
Organizations are pervaded by norms and other a-rational sources of behavior, which has important behavioral consequences. The reason that rationality is limited in an organizational context is because members of organizations perceive the world and calculate future outcomes through a social filter set by their coworkers. They substitute institutional judgment for individual judgment. They satisfice rather than optimize because their decision space is set by their social role or function. They are heavily motivated not simply by narrow economic self-interest but also by norms of loyalty, reciprocity, professional pride, or the desire to maintain tradition. Markets seldom shape individual’s sense of their own identity; organizations do.
The role of the institutional leader should be clearly distinguished from that of the “interpersonal” leader. His main contribution is to the efficiency of the enterprise. The institutional leader, on the other hand, is primarily an expert in the promotion and protection of values.
They emphasize the frequently dysfunctional character of “best practice” mentality, where a practice that works in one part of the world is immediately publicized and set up as a model for other parts of the world to follow. Successful programs are often idiosyncratic, involving what James Scott labels metis — the ability to use local knowledge to create local solutions.
Why should we permit — indeed, encourage — a high degree of diversity in the way that private firms organize themselves and make business decisions and yet insist that public agencies be stamped out of a single, best-practice administrative die?
The great disadvantage of public administration compared to private sector management is that private firms are exposed to a ruthless Darwinian process of competition and selection, while public sector agencies are not.
What had all this to do with feudalism? An American arrangement designed historically to eliminate the spoils system was to be applied to a country that had none. I sometimes thought that if the Mission had been sent to the Arctic Circle instead, it would have come up with the same prescription for the Eskimos, seals, and seagulls.
It is hard to know which was more striking — the Hoover mission’s ignorance of local conditions or its arrogance.
The local character of the knowledge required to design a wide variety of good administrative practices suggests that administrative capacity isn’t transferred from one society to another by developed-world administrators sitting around lecturing their less-developed counterparts about how things are done in their country or in a mythical “Denmark.” General knowledge of foreign administrative practices need to be combined with a deep understanding of local constraints, opportunities, habits, norms, and conditions. This means that administrative and institutional solutions needs to be developed not just with input or buy-in from the local officials who will be running local institutions, but by them. The East Asian fast developers with strong governance imported certain institutions but modified them substantially to make them work in their societies. They certainly did not grow by allowing foreign donors to established institutions in their own country that crowded out domestic ones.
It has been a longstanding dream of the social sciences to turn the study of human behavior into a true science, moving from mere description to formal models of causation with nontrivial predictive value, based on rigorous empirical observation. This project can be realized more readily in some spheres of human behavior than in others. Markets are susceptible to this kind of analysis, which is why economics emerged as the queen of social sciences in the late 20th century. But organizations constitute a complicated case. Individuals in organizations look out for their narrow self-interests, and to the extent they do, the economists’s methodological individualism provides genuine insight. But to a much greater extent than in than in markets, norms and social ties affect individual choices in organizations. The effort to be more “scientific” than the underlying subject matter permits carries a real cost in blinding us to the real complexities of public administration as it is practiced in different societies.
Sovereignty and the nation-state, cornerstones of the Westphalian system, have been eroded in fact and attacked in principle because what goes on inside states — in other words, their internal governance — often matters intensely to other members of the international system. But who has the right or the legitimacy to violate another state’s sovereignty, and for what purpose? Is there a source of international legitimacy that does not itself depend on the existence and strength of sovereign nation-states? If not, doesn’t the attack on the sovereignty become a self-contradictory enterprise?
It was also, in the 1990s, a general failure of the historical imagination, an inability of the post-cold-war West to grasp that the emerging crisis of state order in so many overlapping zones of the world — from Egypt go Afghanistan — would eventually become a security threat at home.
In the debates over humanitarian intervention, the case was made that the Westphalian system was no longer an adequate framework for international relations. The Westphalian system was built around a deliberate agnosticism over the question of legitimacy. The end of the Cold War, it was argued, brought about much greater consensus within the world community over the principles of political legitimacy and human rights than before. Sovereignty and therefore legitimacy could no longer be automatically conferred on the de facto power holder in a country. State sovereignty was a fiction or bad joke in the case of countries like Somalia or Afghanistan, which had descended into rule by warlords.
In the US, this effort has come to be known as nation-building. This terminology perhaps reflects the national experience, in which cultural and historical identity was heavily shaped by political institutions like constitutionalism and democracy. Europeans tend to be more aware of the distinction between state and nation and point out that nation-building in the sense of the creation of a community bound together by shared history and culture is well beyond the ability of any outside power to achieve. They are, of course, right; only states can be deliberately constructed. If a nation arises from this, it is more a matter of luck than design.
The big arguments are not over the principle of sovereignty per se, which few people are willing to defend in a pure form any longer. It is clear that not all sovereignties are created equal and that poor governance contributes directly to downgrading of the international community’s respect for a country’s sovereignty. This shift, to repeat, ddi not occur after 9/11 but rather was developed in the course of the humanitarian interventions of the 1990s.
The argument among members of the international community today focuses instead on the question of who gets to decide on whose sovereignty to violate, and on what grounds. To what extent does it remain the prerogative of sovereign nation-states, and to what degree must such decisions be constrained by international laws or norms? These questions take us into the domain of a different set of democratic legitimacy issues, this time focused not so much on individual states but on the international system. This debate has exposed an enormous gulf between the US and its European allies, which is likely to be a neuralgic source of friction for some time to come.
It is thus hard to argue that the Europeans have a substantially better record with regard to multilateralism than the US in economic matters. Both have violated international rules when it has been convenient, while asserting the importance of a rule-based international order. The worst area is agriculture, where US and European subsidies to domestic producers impose enormous costs on poor countries.
But the Bush administration also made clear that it would not take no for an answer from the Security Council and would proceed with military action against Iraq regardless of the views of the veto-bearing permanent members.
A great deal of European irritation with the US arises from stylistic matters and from the Bush administration’s strange failure to consult, explain, justify, and cajole in the manner of previous administrations. The administration could have let ratification of Kyoto languish in Congress as the Clinton administration did, rather than casually announcing the withdrawal from the pact at a luncheon for NATO ambassadors. The US has had a consistent record of using strong-arm tactics to shape international agreements to its liking, and then to walk away from them at the last moment. This pattern goes all the way back to Woodrow Wilson and the League of Nations and was continued in negotiations over the Rio Pact, Kyoto, and the ICC.
Underlying the current disputes is a much more fundamental difference in principle between the US and many European countries over the source of democratic legitimacy on an international level. To put it rather schematically and oversimply, Americans tend not to see any source of democratic legitimacy higher than the constitutional democratic nation-state. To the extent that any international organization like the UN has legitimacy, it is because duly constituted democratic majorities have handed that legitimacy up to them in a negotiated, intergovernmental process. Such legitimacy can be withdrawn at any time by the contracting parties; international law and organization has no existence independent of this type of voluntary agreement between sovereign nation-states.
Europeans, by contrast, tend to believe that democratic legitimacy flows from the will of an international community much larger than any individual nation-state. This international community is not embodied concretely in a single, global democratic constitutional order, yet it hands down legitimacy to existing international institutions, which are seen as partially embodying it. Thus, peacekeeping forces in the former Yugoslavia are not merely ad hoc intergovernmental arrangements but rather moral expressions of the will and norms of the larger international community.
There are multiple reasons why this difference on international legitimacy exists between the US and Europe. Robert Kagan has argued that it is based on the relative power of the US over Europe. The Europeans, he argues, like international law and norms because they are much weaker than the US, and the latter likes unilateralism because it is significantly more powerful than any other country or group of countries (like the EU) not just in terms of military power but also economically, technologically, and culturally.
It is of course undeniable that small, weak countries that are acted on rather than influencing others naturally prefer to live in a world of norms, laws, and institutions, in which more powerful nations are constrained. Conversely, a “sole superpower” like the US would obviously like to see its freedom of action to be as unencumbered as possible.
The states of Western Europe concluded at the end of the WW2 that it was precisely the unbridled exercise of national sovereignty that got them into trouble through two world wars in the 20th century. The house that they have been building for themselves since the 1950s called the EU was deliberately intended to embed those sovereignties in multiple layers of rules, norms, and regulations to prevent those sovereignties from ever spinning out of control again.
Germans for many years after WW2 taught their children not to display the German flag or cheer too loudly for German teams at football matches. The kind of patriotism Americans displayed in the aftermath of 9/11 is thus quite foreign and, indeed, distasteful to them — and would, if displayed by the Germans themselves, be distasteful to everyone else.
This sense of exceptionalism extends to its own democratic institutions and their legitimacy. Unlike most of the old societies of Europe, the US was founded on the basis of a political idea. There was no American people or nation prior to the founding of the country: National identity is civic rather than religious, cultural, racial, or ethnic. There has been only one American regime, which, as the world’s oldest continuously existing democracy, is not viewed as a transient political compromise. This means that the country’s political institutions have always been imbued with an almost religious reverence that Europeans, with more ancient sources of identity, find peculiar.
Moreover, for Americans, their Declaration of Independence and Constitution are not just the basis of a legal-political order on the North American continent; they are the embodiment of universal values and have a significance for humankind that goes well beyond the borders of the US.
The situation of Europe — as well as developed Asian societies like Japan, for that matter — is very different. Europeans and the Japanese were peoples with shared histories long before they were democracies. They have other sources of identity beside politics. They have seen a variety of regimes come and go, and some of those regimes have, in living memory, been responsible for very shameful acts. While the French and, in a different way, the British continue to feel a sense of broader national mission in the world, it is safe to say that few other European countries regard their own political institutions as universal models for the rest of the world to follow. Indeed, many Europeans regard their national institutions as having a much lower degree of legitimacy than international ones, with the EU occupying a place somewhere in between.
Decisions by sovereign liberal democracies that are correct procedurally are not guaranteed to be just or in accordance with these higher principles. Democratic majorities can decide to do terrible things to other countries and can violate human rights and norms of decency on which their own democratic order is based. Indeed, the Lincoln-Douglas debates were over this precise issue. Douglas argued that he cared not whether the people voted slavery up or down, as long as the decision reflected the will of the people. Lincoln by contrast said that slavery in itself violated the higher principle of human equality on which the American regime was based. The legitimacy of the actions of a democracy are not in the end based on democratic procedural correctness but on the prior rights and norms that come from a moral realm higher than tat of the legal order.
The problem with the European position is that while such a higher realm of liberal democratic values might theoretically exist, it is very imperfectly embodied in any given international institution. The very idea that this legitimacy is handed downward from a disembodied international level rather than handed upward from concrete, legitimate democratic publics on a nation-state level virtually invites abuses on the part of elites who are then free to interpret the will of the international community to suit their own preferences.
The second important practical problem with the European position is that of enforcement. The one power that is unique to sovereign nation-states, even in today’s globalized world, is the power to enforce laws. Even if existing international laws and organizations did accurately reflect the will of the international community (whatever that means), enforcement remains by and large the province of nation-states. A great deal of both international and national law coming out of Europe consists of what amounts to social policy wish lists that are completely unenforceable. Europeans justify these kinds of laws by saying they are expressions of social objectives; Americans reply, correctly in my view, that such unenforceable aspirations undermine the rule of law itself.
According to Kagan, the European are half right: They have indeed created an end-of-history world for themselves within the EU, where sovereignty has given way to supranational organization. What they don’t understand, however, is that the peace and safety of their European bubble is guaranteed ultimately by American military power.