I don’t think many people would dispute the idea that the observance of common rules plays an important role in making it possible for individuals to live together peacefully in society. Even if I were to quote something written by Friedrich Hayek that emphasizes the importance of that idea, I doubt whether that would provoke many people to dispute it. (For some suitable quotes from Hayek, see: Are the institutions of the “good society” the same as those of the “great society”? )
However, in this instance accepting the logic of a proposition is only one step along the road to understanding its practical significance. It might be useful to know to what extent the peacefulness of societies can be attributed to various factors associated with observance of common rules – factors such as political stability, the quality of legal institutions, civil liberties, and strong social networks and relationships. I report below an attempt to assess the relative importance of these factors using regression analysis.
The measure of the peacefulness of societies used in the analysis is the Legatum Institute’s safety and security sub-index (LSS), which is a component of its Prosperity Index. Indicators covered in the LSS include standard measures of violence such as homicides and assault, refugees and displace persons, flight by professionals (brain drain), civil war and ethnic violence, survey information relating to incidence of theft and perceptions of whether people feel safe walking alone at night. (I compared the LSS and the Global Peace Index here.)
The measure of political stability is the World Bank’s political stability and absence of violence index which captures perceptions of the likelihood of governments being overthrown by unconstitutional or violent means.
The measure of the quality of legal institutions is the World Bank’s rule of law index. This index captures perceptions about contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence. The appropriateness of this index for current purposes is discussed here.
The measure of civil liberties is the Freedom House civil liberties index. This index covers freedom of expression and belief, associational and organizational rights, rule of law and personal autonomy.
The measure of social networks and relationships is the Legatum Institute’s social capital sub-index (LSC), which is a component of its Prosperity Index. The coverage of the LSC includes perceptions relating to reliability of others, importance of friends, trustworthiness of others and membership of various types of community organizations.
To enable the estimated contribution of the explanatory variables to be compared more readily all indexes have been converted to the same form as the Legatum indexes i.e. with highest value equal to one and the lowest value equal to zero. Estimated coefficients (with standard errors in brackets) are as follows:
• Intercept: 0.06 (0.03)
• Political stability: 0.46 (0.06)
• Quality of legal institutions: 0.42 (0.06)
• Civil liberties: -0.02 (0.05)
• Social capital: -0.01 (0.04) Adj. R squared = 0.82
The results confirm that political stability and quality of legal institutions play an important role in explaining the peacefulness of societies. They suggest that civil liberties and social capital do not play a significant independent role in this context, but it is possible that these factors may contribute positively to political stability and the quality of legal institutions.
A chart showing how well political stability and quality of legal institutions predict the peacefulness of societies is shown below.
It is apparent from the chart that actual peacefulness is never much greater than predicted peacefulness. This means that political instability and poor quality legal institutions virtually guarantee that a society will not be peaceful.
The authors of ‘Governance Matters’, Daniel Kauffman, Aart Kraay and Massimo Mastruzzi, tell us that the World Bank’s rule of law index captures “perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence” (Working Paper 4978, p 6).
On the basis of that description the index seems highly relevant to assessment of whether societies have institutions that enable their members to live in peace with one another. (For background on reasons why I am interested in such indexes see: Is a ‘good society’ index a good idea?)
I think it would be more appropriate to describe this index as a legal institutions index than as a rule of law (RoL) index. The rule of law is the ancient principle that no-one, not even the king, is above the law. It possible for a jurisdiction to have a relatively high score on the World Bank’s RoL index even though its legal foundations for rule of law may be somewhat tenuous e.g. Hong Kong. (Someone might be interested in a previous post on the question: Is rule of law an esoteric concept?)
As with the five other indexes in the World Bank’s suite of governance indicators the RoL index is based on perceptions based data reflecting the views of a diverse range of people, including tens of thousands of household and firm survey respondents and thousands of experts working for the private sector, NGOs, and public sector agencies. The aggregation method gives greater weight to indicators that are correlated with each other.
The RoL index seems to cover similar ground to the Legal structure and property rights sub-index (LSPR) of the Fraser Institute’s economic freedom index. Indicators incorporated in the LSPR cover: judicial independence, impartial courts, protection of property rights, military interference in legal and political processes, integrity of the legal system, contract enforcement and regulatory restrictions on sale of property.
The chart below shows how closely the World Bank’s RoL index and the Fraser Institute’s LSPR index correspond to each other. The blue diamonds represent actual indexes and the pink diamonds represent the predicted value of the LSPR index using linear regression.
In later posts relating to good society indicators I will use the World Bank’s RoL index as an index reflecting the quality of legal institutions.
In my last post on the Global Peace Index (GPI) I implied that potential users (such as myself) who are primarily interested in the internal peacefulness of different societies would be more interested in a sub-index excluding the effects of militarization. It so happens that a sub-index of the Legatum Prosperity Index, the Safety and Security Sub-index (LSS), may provide a good measure of internal peacefulness.
Indicators covered in the LSS include standard measures of violence such as homicides and assault, refugees and displace persons, flight by professionals (brain drain), civil war and ethnic violence, survey information relating to incidence of theft and perceptions of whether people feel safe walking alone at night. The safety and security indicators covered in the GPI seem to be broadly similar.
The LSS and GPI are compared in the chart below. The position of each blue diamond reflects the scores on both index for each country. The pink diamonds are predicted scores of the GPI resulting from a linear regression.
It is apparent from the chart that both indexes present a similar picture of the peacefulness of the vast majority of countries. The two main exceptions are Israel and the United States – which have a higher level of internal peacefulness than others with similar GPI scores.
The creators of the Global Peace Index (GPI), the Institute for Economics and Peace (aka Vision of Humanity), claim that their index represents the first attempt that has been made to rank the nations of the world by their peacefulness. The GPI is apparently the brainchild of Australian entrepreneur, Steve Killelea, but has been developed in conjunction with the Economist Intelligence Unit and with the guidance of an international team of academics and peace experts.
As noted in the 2009 GPI report, peace is notoriously difficult to define. The approach adopted was to define peace as ‘absence of violence’ and to use metrics that combine both internal and external factors to rank144 countries. The Index is composed of 24 indicators covering three broad categories: measures of ongoing domestic and international conflict, measures of safety and security in society and measures of militarization.
The third category seems to me to raise a problem because it may sometimes be possible for us to promote peace more effectively by sending potential aggressors a credible message that if they mess with us they will suffer hellish consequences, rather than by disarming to convince them that we do not pose a threat. Instead of basing the index on the assumption that unilateral disarmament would promote peace I think it would have been preferable to leave this question open for further research.
For the benefit of potential users (such as myself) who are primarily interested in the internal peacefulness of different societies it would be desirable for the creators of the GPI to publish sub-indexes which exclude the effects of militarization (and international conflicts).
In view of the way the GPI has been constructed it is not surprising that a country like New Zealand, which does not have any reason to feel threatened by any other country, should be given the highest ranking as a peaceful country. The United States could be expected to have a somewhat lower ranking because of its greater militarization. I was surprised, however, that the GPI ranking of the U.S. is as low as 83 out of 144.
The relatively low ranking of the U.S is not entirely attributable to militarization. The percentage of the population in jail in the U.S. is apparently higher than in any of the other countries included in the index and the rate of homicide is higher than in New Zealand (and many other countries including Australia and the Britain).
The chart below indicates that it is possible for a country to have a relatively low GPI ranking while remaining relatively peaceful. For example, despite its relatively low ranking, the GPI score of the U.S. is much closer to that of New Zealand than to that of Iraq.
One final thought might be worth noting. This measure of the peacefulness of nations does not take account of the extent that different governments pursue policies that induce some of their residents to send their capital to other jurisdictions to avoid confiscatory taxation. This omission may be important for users who are interested primarily in the internal peacefulness of different societies.
