An ironic side-effect of globalisation is that relatively small, local stories – the budget policies of Argentina, corruption in Indonesia, the stability of Saudi Arabia – matter more than ever. Identifying the political dynamics that produce or undermine stability, the dynamics that well-intentioned policies may produce and the unintended consequences that may result are absolutely critical in understanding how countries work.
“The unfolding of recent events in Iraq and Afghanistan shows that understanding the local details is more important than ever before,” notes University of Chicago Professor Marvin Zonis. In The Kimchi Matters: Global Business and Local Politics in a Crisis-Driven Age, the latest book by Professor Zonis, Dan Lefkovitz and Sam Wilkin, the focus is on laying out a framework for understanding and forecasting local political dynamics which, in this era of globalisation, increasingly drive global markets and national economies and determine the stability of the world.

Local dynamics

Why kimchi? The fermented cabbage leaves are central to Korean cuisine and, unlike the Big Mac that is served around the world, kimchi is local and particular. In short, understanding the kimchi, that is to say, local political dynamics of different countries, is critically important to the success of international business and foreign policy in an era of globalisation.
The following is an excerpt that outlines a number of the broad conclusions drawn in the book:

“First, we recognise the indisputable truth in the claim that colonialism did extraordinary damage to much of the developing world – although not in the simplistic way that is often contended. Whether some of the atrocities perpetrated by colonial regimes create a moral responsibility that persists to the present is open to debate. Much of the rhetoric about colonialism – that the rich countries continue to oppress poor countries even to this day – is certainly false. Most of this rhetoric is scapegoating intended to distract attention from problems developing-country governments have created for themselves.
“Still, a crucial cause of the continued poverty in much of the developing world is the institutional structures created as a result of colonialism, both in terms of politics and economics. The assets of a good colony are the liabilities of an independent country. Many ethnic and religious conflicts were created by colonial regimes, via the arbitrary drawing of borders or the promotion of favoured locals. Many entrenched interest groups were established by colonial governments and remain the powers behind the throne to this day. Indeed, it is a very rare developing country whose political and economic institutions were not warped by colonialism in a way that makes economic development extraordinarily difficult.

“Second, equality matters. A theme that has emerged again and again is that excessive inequality hobbles development. Often, money buys power, regardless of the form of the political system, so a rich elite is able to rig the system to preserve its privileges and, in the process, prevent economic growth. Crony capitalists shut down markets to prevent competition to their businesses. Agricultural landlords disrupt the provision of public goods, even such basic public goods as education, in an effort to preserve their political and economic power. The result is a dysfunctional political dynamic. This is emphatically not to say that outright redistribution of wealth always, or even often, works. Attempts to redistribute wealth tend to degenerate into even worse cronyism. But high levels of inequality, reinforced by entrenched interests, always present risks to stability and growth. It is paradoxical but nonetheless true that the rich are often the enemies of economic growth and market economics.

“Third, today’s unstable boom is tomorrow’s crisis. The principle of the J-curve is that countries that boom and then go bust are often more unstable than countries that never boom at all. There are certainly opportunities in developing markets – the list of best-performing stock markets of the last 10 years is dominated by developing countries: China, Turkey, Bangladesh, Kenya, Poland and Jamaica, among others. However, investors should always beware of countries that are fundamentally unstable yet (temporarily) doing extraordinarily well.

“Fourth, aid poorly given is often worse than no aid at all. US aid has fostered the unnatural survival of many corrupt regimes, which can then distribute handouts to maintain support. Development aid given to countries with good policies can increase growth and alleviate poverty. But ‘strategic’ aid given to key allies can be a disaster. When the kleptocratic regimes that receive this aid eventually collapse, the resulting public anger is often directed against their foreign sponsors.

“Fifth, attempts to promote economic development must take the kimchi into account. The evidence is strong that free markets and liberal democracies are the best way to promote prosperity and stability. These systems are extraordinarily successful in the production of legitimacy and the unleashing of economic potential energy. However, just because the end goal is known does not make it easy to get there. China, for instance, produced rapid economic growth with highly unorthodox policies – not just authoritarianism, but also government-owned enterprises and anonymous bank accounts. Indeed, declaring that the shortest distance between two points is a straight line, and making policy on this basis, is sometimes disastrous.
“Attempts at orthodox economic reforms in Russia unleashed highly destructive political dynamics. The shortest distance to the end goal of prosperity may not be a straight line, but rather may require some twists and turns to take account of a country’s unique kimchi. As China scholar Yingyi Qian put it: ‘The real challenge of reform facing transition and the developing countries is not so much about knowing where to end up, but about searching for a feasible path toward the goal.’

“Sixth and finally, to repeat, the kimchi matters. What emerged again and again in our research is that ‘one size fits all’ solutions do not work. Attempts to see the world as a single nation do not work. Attempts to impose standardised economic reform policies do not work. Attempts to label countries simplistically as allies or enemies do not work. In the less globalised world of yesterday, the costs of these mistakes were bearable. But with every advance in technology that brings us closer together, the fallout from these errors grows larger and more painful. Local political dynamics have a way of undermining even the most commercially astute international business strategies and the most well-intentioned foreign policies. These political dynamics and their unintended consequences cannot be ignored. Economic reforms must take into account vested interests and institutions. Foreign policy and development aid must take into account the mechanics of ruling bargains. And most importantly, global businesses, as they seek to bind the world closer together, must take into account the kimchi, if they are to profit and to bring prosperity to us all.”


The Kimchi Matters: Global Business and Local Politics in a Crisis-Driven Age by Marvin Zonis, Dan Lefkovitz and Sam Wilkin. Published by Agate (e-mail: publicity@agatepublishing.com)

Printer friendly version

Email this to a friend