How we measure political capacity
Investing successfully in a country requires understanding the country’s political capacity.
Political capacity tells us about the ability of a country’s domestic actors ( government, business, civil society) to make and enforce agreements. The charts below reveal 4 ways to measure Enlightenedstan’s, Developingstan’s, and Failingstan’s political capacity to govern itself. The stronger each of these dimensions of political capacity is, the greater the capacity of the country to respond to existential threats.
Distribution of power reveals who establishes and enforces the basic rules of the country.
Civil society reveals the ability of the country’s public to form local associations, act in response to threats and opportunities, and exert pressure on their government.
Governmental bureaucracy reveals the ability of the government to enforce the law and to provide public goods.
Control of borders reveals the ability of the country’s military, diplomatic service, economy, and culture to filter influences from outside the country.
Investors in Enlightenedstan can trust that contracts will be enforced anywhere in the country, in any industry.
Investors in Developingstan will need to depend on city or regional governments, tribes, or civil society governance networks for contract enforcement because the central government is so weak.
Investors in Failingstan will need to depend on a partnership of tribal or civil society governance networks with powerful regional or international actors for contract enforcement, because the central government and local governments are so weak. Enforcement will only be as strong as the partnership and the ability of the tribe or civil society actors to protect the venture. The civil war will be a continuous threat to the venture and every partner in the venture.