As our ancestors have successfully explained, the rotten apple injures its neighbors

The Shanghai Cooperation Organization (SCO), originally called the Shanghai Five, was established by Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan. Later, Uzbekistan joined the SCO. I have to admit that I haven’t heard of it until today. Anyways. The GDP per capita of these countries in proportion to that of the US are as follows: Russia: 33.2 percent, China: 20.4 percent, Kazakhstan: 26.9 percent, Kyrgyzstan: 4.9 percent; Tajikistan: 4.0 percent, and Uzbekistan: 6.3 percent. The ratio for Turkey is 29.8 percent.

What history tells us

There are a lorry load of studies that question the reasons for large income gaps between countries and the ways to close the gap (by the way, I am referring to the income gap between rich countries and the SCO countries, not that among the SCO countries). Early the morning I wrote these lines, I was waiting in queue for a transaction and while waiting, I was skimming through an influential book by two economists who also have worked on the issue: Why Nations Fail? by Daron Acemoğlu and James Robinson, 2012. I read the chapter on authoritarian regimes that prevent technological advancement on grounds that it can threaten their authority.

For example, Francis, emperor of Austria-Hungary, opposed to the railway construction in the early nineteenth century and Tsar Nicola in Russia in the mid nineteenth. China prohibited foreign trade in the 1300s and 1440s and put restrictions on ship building. These historical examples do not have any direct connection with the SCO, of course. But the critical point is that development is difficult without democracy. The book also involves interesting photos, like that of children working in cotton fields in Uzbekistan. It is true that such scene is quite familiar for us in Turkey. But that is the very problem: what type of a country does Turkey want to become? One where children do not have to work, more importantly where child labor is forbidden and this rule is actually implemented? Or one in the exact opposite position?

In each and every study on growth you will see that there are only a few examples of countries that had low income in the early post-WWII period but achieved rapid growth and converged with rich countries. But growth theories claim the opposite: poor countries are supposed to converge with rich countries.

Unfortunately, such automatic convergence has not taken place so far. On the contrary, countries that have similar characteristics converge with each other. Here, similar characteristics refer to a similar level of democracy and human rights, a similar environment of doing-business, similar savings propensities, and similar rule of law and so on.

To talk with idioms, the rotten apple injures its neighbors or he that lies down with dogs will rise up with fleas. That’s the deal.

This commentary was published in Radikal daily on 31.01.2013