The disparities between the world's richest and poorest nations are wider than ever. Northern countries exponentially become more affluent while the Southern states continue to suffer and economically decline. Politically, Southern countries are much more unstable than the countries in the North and are often faced with internal war, starvation, and oppression. These countries, if endowed with the right institutions, would unquestionably have stronger economies and be more politically secure. Furthermore, more stable and liberated nations would lead to a more peaceful, prosperous, and just world. This theory can be supported by examining how democracy, human rights, and free markets affect a nation's social and economic welfare, and how the condition of each individual state plays a critical role in international relations.
Democracy When the IMF lends money to a struggling country, the borrowing nation will often receive a list of strict conditions that accompany the loan. Typically, the IMF will demand the nation make structural adjustments to its current political systems and financial institutions. This means that the country should work towards becoming more capitalistic and democratic, because the nations that must borrow money are usually based upon a communist or socialist system with dictatorial leadership. The IMF hopes that through its money lending leverage, these countries will move from tyrannical representation to a government built on equality and advancement, where even the most depressed economies will have a chance to become prosperous. Evidence shows that democracy coupled with a free market economy works. It helps to foster peace, ensure justice, and to improve education and healthcare.
It also increases a nation's wealth through improved employment and worker incentives and by stressing the importance of technology. Democracy is the foundation for economic, social, and cultural prosperity because it puts power in the hands of the people and not a self-interested elite. Therefore, when the IMF calls for "structural adjustment programs", it often means a complete reversal from the current political system that until then may have been oppressive and corrupt. A modern example of the importance of effective government and its influence on the prosperity of a nation is found in Korea. Korea was once a single country, and from the 700's to 1945, the people on the Korean peninsula were unified under one government.
During its long history, Korea has been invaded by the powerful countries that surround it, and in 1910, Japan took over Korea for over three decades. Two Korean leaders, with very different political beliefs, fought hard to free Korea from Japanese rule. One led in the North (Kim Il-Sung, father of the current North Korean dictator), and one led in the South (Syngman Rhee). Rhee was influenced by the United States and Britain and he wanted to establish a democratic government, while Sung was influenced by China and the former USSR and considered a communist government a recipe for success.
In 1948, Korea was divided into two countries based upon these two very different political approaches. Because of the recent events in North Korea, the world's attention has been drawn once again to the Stalin-like reign of current dictator Kim Jong-Il. The difference between North and South Korea are astounding. During the last fifty years, South Korea has developed as one of the strongest economies in Asia.
It produces cars, cell phones, and computers used all over the world. People elect their president by a direct vote, and democracy has helped South Koreans become economically independent and prosperous. North Korea, on the other hand, is devastatingly poor and its economy is continually deteriorating. Although North Korea spends incredible sums on weapons and its military, it does not produce or buy enough food for its people. Millions of North Koreans have already starved to death, and the situation has continued to worsen despite large amounts of foreign aid.
Now place North and South Korea in a global perspective. The UN and Unites States have been at odds with North Korea for decades and it seems to be a country that loves to press international buttons. From war in the 1960's to modern day threats of nuclear attacks, North Korean leaders show as much disregard to international law and stability as they do to the lives of their own citizens. In fact, the situation in N. Korea is so terrible, the leaders may believe they have little to lose if war breaks out: their country is permanently at war against itself. However, the threat of nuclear war is not something the United States and other countries will take lightly, which means North Korea may soon face physical disarming from the international community.
North Korea stands in stark contrast to its successful southern counterpart. Democracy has helped S. Korea become economically prosperous and treat it's citizens fairly. It is easy to see how democracy plays an integral part in the strength and healthiness of a country, and that international stability is dependent upon the domestic situation of individual states. Human Rights The importance of upholding human rights is closely related to the previous argument supporting democracy. Human rights are the basis of all political and economic systems. Every country has a different idea about what rights their citizens should hold, however there is mass consensus that inalienable rights - the rights to "life, liberty, and pursuit of happiness" - are universal and fundamental.
To continue with the example of the disparity between North and South Korea, consider the difference between the rights held by each states' citizens. In South Korea, people are free to get information from the Internet and from a variety of television and radio stations in the country and around the planet. They can also travel freely worldwide. North Koreans, however, may only hear and read what the government has pre-approved. They may not travel outside their country or surf the Internet. They are required to show their loyalty to their leader in many ways, including having a picture of him in their homes.
Speaking against the government in anyway is illegal and even punishable by death. Rights held by citizens vary throughout all countries and cities and they affect the daily lives of every human being. Simple things that Americans take for granted, like owning property or going to college, are prohibited in other countries. When a government starts to disregard and violate citizens' essential rights, the international community may get involved. Ironically, sometimes in the quest for peace, war among nations will erupt.
Securing human rights means ensuring that all people have a political voice and access to strong institutions capable of providing them with the kind of personal security, access to justice, and services, from health to education, they need. These rights are vital to the strength of a nation, and to the world. Free Markets After taking many economics classes, I understand the importance of laws that support and reward innovation. Copyrights, patents, and other legal protections assure the inventor that they will be rewarded for their hard work.
Without these laws, inventors lack the incentive to invest their time and money. The 'Growth System' theory states that the key to a prosperous economy is having institutions that encourage innovations. Probably the best example of how important this concept is comes from Western Europe during the Middle Ages. Europe (along with even some eastern countries) was controlled by guilds, and a person was unable to practice a certain trade unless he received permission by the respective guild.
The self-interest of each of the members of the guild prevented allowing many gifted tradesmen to enter, because more competition obviously meant losing monopolistic status in the community. The guild also discouraged outside trading and stifled innovation by restricting the market to only those who were Guild Approved. These trade societies did have a certain value, however. They fostered democracy and provided economic stability for all who were licensed to practice. Nonetheless, the stability that they provided eliminated competition and motivation for improving techniques. It also prevented traders from advancing economically and from expanding their business.
Since breaking from the guild system, Western Europe has flourished economically and nations have become increasingly technologically and culturally advanced. The Scientific Revolution that unfolded throughout Europe during the 16th and 17th century placed emphasis on experimentation and innovation and questioned the value of the out-dated government systems that governed trade. Western European countries now have (at least partly) free markets that allow producers to work in any field and set their own prices. To be able to trade freely in the international market is very important to the health of each country's economy. Because of this transition to an open market, the states of Western Europe are some of the richest in the world. Most are allies of the U.S. and are in a position of power internationally.
Countries with free markets are more prosperous than their communist counterparts because they allow for competition and let supply and demand naturally adjust. In conclusion, if countries were endowed with the right institutions, the world would be more peaceful, prosperous and just. By looking at examples from the middle ages to today, it is clear that countries founded on effective and fair establishments are remarkably more successful than those who are not. Democracy, human rights, and free markets are critical to every country's economy and political stability, and to a world without war and injustice.