Of all the factors that shape individual life outcomes, luck is the most elusive. The fact that life can be unfair is something most of us recognize and learn to cope with. We do the best we can in our circumstances and pray that our efforts are enough to get us to where we want to be. For those who are not lucky, the sad reality is that often, the effects of their bad fortunes are not limited to them individually; the lives of generations of their descendants tend to be adversely impacted as well.
It turns out that this crucial role that luck plays in the destinies of individuals applies to nations as well. That is the central argument made by Daron Acemoglu and James Robinson in their book, Why Nations Fail. According to them, in every nation’s history, there is a “critical juncture” at which leaders face a set of “contingent paths,” one of which they must choose to follow. The authors say that the direction taken by leaders of a particular nation at its critical juncture largely determines whether that nation develops into a prosperous, happy place for its citizens, or turns into a poor, dysfunctional state that, sometimes, ultimately fails.
Russia, Ukraine, and the other post-Soviet nations each came to such a critical juncture when the Soviet Union broke up in 1991. In each of the newly independent states, the aspiration of ordinary citizens was a transition to democratic rule and economic liberalization to help establish the types of free and wealthy societies they knew their Western counterparts lived in. By and large, those hopes were dashed. In the majority of those nations, the Soviet communist regimes have been replaced by autocratic rulers who, together with their cronies and the oligarchs they helped create, have plundered state assets, leaving millions of average citizens trapped in poverty, instead of the prosperity they once hoped for.
The case of Ukraine illustrates how things can go horribly wrong for a country at a critical juncture. With a land size of 232,951 square miles, it is the second largest country in Europe (after Russia). Ukraine has abundant deposits of numerous natural resources, and was once considered the breadbasket of Europe because of its fertile soil. And, with a well-educated population, it had all the ingredients to become one of the wealthiest European countries.
Unfortunately, its leaders chose the wrong path. A multi-decade rule by a corrupt elite has left Ukraine in perpetual socio-economic turmoil. Widespread frustration with endemic corruption and bureaucratic incompetence triggered the Maidan Revolution in 2014, during which government soldiers killed over 100 protesters and injured thousands more. Those events subsequently led to Russia’s annexation of Crimea, and the current separatist war in eastern Ukraine. Ukrainians decided to try something new in their recent national election. Entrusting the country’s presidency to Volodymyr Zelensky, a television comedian with no political experience, is testament to how little faith they have in the leaders who have been in charge to date.
In a sense Americans took a similar leap of faith with the election of Donald Trump in 2016. But they did so in the knowledge that their country has a strong institutional framework in place to serve as a guardrail for the politically inexperienced Trump. Ukraine doesn’t have that luxury. It has weak institutions, which is precisely the reason its corrupt elite has been able to get away with so much.
I personally wish Zelensky the best. I have a stake in his success—or failure—because Ukraine has a special significance for me. During my six-year stay there in the late 1980s to early 1990s, I made many friends who I would love to see live in peace and prosperity.
The global landscape is littered with examples of country after country with immense economic potential that has been wasted due to bad choices at crucial stages by their leaders. In 2011, the world celebrated the independence of its newest nation, South Sudan, which had voted to secede from Sudan after a bloody civil war between the north and south. The expectation was that revenues from South Sudan’s enormous oil reserves would be used to improve the lives of the country’s poor. Instead, infighting within the ruling class quickly degenerated into civil war, leaving the country at risk of famine.
This confounding trend makes the achievements of Singapore all the more impressive. At the time of its separation from Malaysia in 1965, Singapore was, by most measures, a poor, Third World country. As a small country with few natural resources, its prospects compared much poorly to those of Ukraine and South Sudan at independence. But, with Lee Kuan Yew’s visionary leadership, Singapore was transformed into a developed country within a few decades. It is one of the richest countries in the world currently, according to the latest GDP per capita data.
The citizens of Singapore are exceptionally lucky. Because their country was blessed with a leader who had the proper vision to make the right selection when faced with his set of contingent paths, they now enjoy lives that ordinary Ukrainians, South Sudanese, and citizens of countries in similar circumstances can only dream about.
The impressive economic success of China in recent decades has been much publicized. Less frequently talked about are some of the behind-the-scenes events that laid the foundations for that accomplishment. In a 2016 essay in Foreign Affairs, Julian Baird Gewirtz wrote about a 1985 meeting that Zhao Ziyang, China’s then prime minister, had with a group of economists from around the world. Among them were the famous Hungarian economist Janos Kornai, and American economist and Nobel laureate James Tobin.
According to Gewirtz, Zhao had invited the economists to China because he was looking for inspiration from international experts to help reform China’s failed socialist economy. Over a one-week period, Zhao sailed with the economists on a luxury cruise vessel along the Yangtze River and listened intently to their presentations. The meeting is said to have occurred as part of the broader effort spearheaded by Deng Xiaoping, the then president, “to gather good ideas from wherever in the world the leadership could find them.” In Gewirtz’s view, the discussions on that vessel that week were instrumental in China’s transformation into the giant economy that it is today.
Perhaps the thinking in countries that haven’t been so lucky with their transitions must begin to change. Visionary leaders such as Lee Kuan Yew, Zhao Ziyang, and Deng Xiaoping are rare, as history shows. A recognition of that unfortunate reality is crucially important. That understanding will help spark what I think are much-needed fresh conversations about what ordinary citizens of a country can and must do in a leadership vacuum. The messiahs they keep waiting and hoping for may never appear.