NEW YORK — One casualty of the uprisings in the Middle East has been the professionals who didn’t see them coming (.....the Smart Economy blog did in 2006 (http://bit.ly/gcBnG1), 2008 (http://bit.ly/fNmKHh), 2009 (http://bit.ly/fdWqWq) and 2011 (http://bit.ly/hEDtRC) and later 2011 (http://bit.ly/gqePQr) --WalterDerzko)
Sizing Up Revolutions in Waiting or Predicting the next uprising By CHRYSTIA FREELAND | REUTERS
http://www.nytimes.com/2011/02/25/world/middleeast/25iht-letter25.html?_r=1
or http://blogs.reuters.com/chrystia-freeland/tag/uprising-index/
NEW YORK — One casualty of the uprisings in the Middle East has been the professionals who didn’t see them coming.
(.....the Smart Economy blog did in 2006 (http://bit.ly/gcBnG1), 2008 (http://bit.ly/fNmKHh), 2009 (http://bit.ly/fdWqWq) and 2011 (http://bit.ly/hEDtRC) and later 2011 (http://bit.ly/gqePQr) --WalterDerzko)
The International Monetary Fund has taken a hit for its April 2010 report on Egypt, which praised the country’s “sustained and wide-ranging reforms since 2004,” noting they had made the economy more durable and less vulnerable to external shocks. Ditto the C.I.A., whose director, Leon E. Panetta, endured the very personal ignominy of seeing his public predictions to Congress proven wrong within hours of making them.
For anyone who watched the collapse of the Soviet Union or the 2008 financial crisis, there is something very familiar about this failure of the experts. There seems to be something about swift, massive paradigm shifts — whether they are the bursting of a financial bubble that has been years in the making, or a popular revolt against a political regime that had been stable for decades — that we find hard to anticipate.
Research by behavioral economists like Dan Ariely, of Duke University in North Carolina, has suggested that part of the problem may be that when we have a vested interest in the status quo, our brains are wired to view it as good and stable. Dr. Ariely’s work has focused on the cognitive blinders our financial self-interest imposes. But a similar bias may shape the views of political experts, who can end up developing a sense of “ownership” of the national elites they study that seems to be nearly as powerful as the proprietary feeling bankers had for the credit derivatives they created.
In a prescient book about democracy and authoritarianism written before he went to work at the White House, the political scientist Michael McFaul argued that assumptions of regime stability are always dominant, and that, when those regimes are authoritarian, these assumptions are always wrong. Mr. McFaul strenuously disagreed with that default view, arguing: “assuming that the current configuration of autocratic regimes in play today will persist 50 years from now is much more naïve than believing that some of these regimes might succeed in making the transition to democracy.”
Mr. McFaul’s conviction is looking pretty good today. But even if we are able to overcome our psychological resistance to the very notion of regime change, anticipating precisely when dictators will be toppled may not be possible. “By their very nature, these tipping points are not predictable,” said Daron Acemoglu, an economics professor at the Massachusetts Institute of Technology.
A better way of thinking about whether regimes will endure, he suggested, might be to try to understand the potential for rebellion, given the right catalyst. “Most of the time it’s dormant and hence there is no predictability of uprisings,” he argued. “But once we enter into a critical period like the current one, this latent factor has some predictive power.”
In that spirit, my colleague Peter Rudegeair and I have done a back-of-the-envelope calculation to identify countries with a high latent potential for uprisings. We considered four factors — political freedom (on the grounds that democracies don’t usually require popular rebellions to achieve regime change), corruption, vulnerability to food price shocks and Internet penetration. Our spreadsheet used publicly available measures of the four factors and came up with a list of 25 most vulnerable countries. Libya, Algeria and Egypt made it into the top 10. Perhaps more surprisingly, so did Russia, Uzbekistan, Azerbaijan and Venezuela.
(back on Feb 12, 2010, I used a similar formula that included food shocks, totalitarianism /authoritarianism, degree of high youth unemployment and the energy card (oil/gas/source or transit country) see my blog here http://bit.ly/gqePQr
According to the Web site for Wired magazine, the U.S. military and intelligence agencies have spent more than $125 million over the past three years on computer models that try to forecast unrest. Bearing that in humbly mind, this fast and dirty calculation is meant to provoke discussion, not to pinpoint the next hot spot.
Dr. Acemoglu suggested that one way to refine this sort of calculation would be to consider ways in which the different factors that make a regime vulnerable to revolution interact: “For example, a lot of corruption without any Internet penetration or a lot of Internet penetration without corruption may create no pressure for uprisings, but when both of them are present that might be a whole different ballgame.”
Lucan Way, a professor of political science at the University of Toronto, said another contributor to regime fragility that it would be worth factoring in to a more sophisticated analysis (you can try this at home!) is whether the authoritarian government is itself the product of recent revolutionary struggle. Dictatorships run by an ideologically united revolutionary party — Iran, for instance, and to a lesser extent China — are, Dr. Way argued, more durable than those whose rulers rely purely on guns and patronage.
Food-price shocks are often the catalyst that tips a regime with a latent vulnerability to an uprising into one facing people in the streets: that was the case in Tunisia, and has been true as far back as the Bolshevik Revolution. Something else that can propel a society with a latent potential for rebellion into action is the demonstration effect, or what Dr. Acemoglu calls “contagion,” a phenomenon also familiar to anyone who was caught in the wildfire global spread of the financial crisis in 2008.
In both cases, the sudden belief that a previously stable status quo could change had the power to alter reality. This interplay between perception and fact is what George Soros, an expert in paradigm shifts in both markets and countries, calls reflexivity.
Even some of the world’s most powerful authoritarian regimes seem to be getting concerned about the danger of contagion and the power of perception. Hence China’s efforts to block electronic information and discussion of the uprisings in the Middle East. The Kremlin may have even more reason to worry: A Russian opinion poll found that one-third of respondents thought the “Egyptian scenario” of mass protests was possible in Russia. That is the kind of thinking that can tip a potential for rebellion into a revolution.
*Update: For ease and simplicity, we used Nomura’s Food Vulnerability Index to calculate how rising food prices would affect a country’s domestic economy. Because Nomura limited their Food Vulnerability Index to 80 countries, our uprising index is also limited to 80 countries. This explains why some countries that seem like they would be prime candidates for having a high latent potential for rebellion — like Iran, Cuba, and Jordan — do not make our list.
Chrystia Freeland is global editor at large at Reuters.
Walter Derzko
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