Every country in the world claims to have a constitution, but only some have constitutional government, and most of the world's people do not live under constitutional government. The term constitution once was synonymous with constitutional government that meant a particular type of political order in which the rulers' authority, including their legislative power, was limited through appropriate institutional devices, and both rulers and citizens were subject to the general law of the land. However, the term has been so debased that the Encyclopaedia Britannica (1987 edition), the most widely read encyclopedia, informs its readers that in the simplest and most neutral sense every country has a constitution no matter how badly or erratically it may be governed.
Constitutional government is an ideal, and like all ideals it can be achieved only as an approximation. Even the countries that appear to be near the ideal are revealed on examination to be not so near. Constitutional government, to the extent it is achieved, reflects a state of affairs that remains under constant threat from power seekers, ideological opponents, ill-informed social engineers, and manipulative special interests. It is also being eroded in the postindustrial era through a serious depletion of social capital, weakening the institutional foundations of constitutional government (Fukuyama 1999). In the more unfortunate countries, economic circumstances, cultural constraints, and entrenched ruling classes create seemingly intractable obstacles to the attainment of acceptable levels of constitutional government. This predicament harms seriously not just the unfortunate people of these countries but also the industrialized democracies of the world.
Deepening our understanding of the conditions that make constitutional government possible thus remains an intellectual task of the highest priority. In the past two decades, scholars have done a tremendous amount of work in this regard. My aim in this article is to make a modest contribution along these lines. I argue specifically that nations achieve constitutional government in the sense used in this article to the extent that they realize the following conditions: (1) prevalence of this particular conception of constitutional government as a dominant ideology; (2) an official constitution in written or customary form that adopts this conception of constitutional government; (3) an institutional matrix that sustains the official constitution and translates it into the experience of the people; and (4) a healthy economy that supports the institutional foundation of constitutional government. It is immediately evident that the third and fourth conditions are interdependent, each being a cause of the other. There is nothing unusual in nature or in culture about reciprocal causation. However, it raises important questions about prospects for breaking and reversing vicious cycles that grip countries whose economic conditions undermine institutions in ways that cause further economic decline. I consider some of these questions and propose that the integration of these countries into the market economy and hence into the liberal constitutional order is an unqualified good for both the industrialized democracies and the Third World.
F. A. Hayek called the ideal of constitutional government under discussion here the constitution of liberty. Its pedigree traces back to the evolutionist thought of the eighteenth century. In The Constitution of Liberty (1978), Hayek presented a restatement of the principles of a free society. He completed this restatement in his monumental three-volume intellectual defense of the rule of law and individual freedom, Law Legislation and Liberty (1976-83). These treatises together explain the constitution of liberty: the logic and the institutional framework of the political order that sustains human freedom. The constitution of liberty is not a specific constitution but a coherent set of general principles that characterize a constitution capable of securing freedom. At the heart of the constitution of liberty is the supremacy of general laws over all authority, public or private. Its modalities include the rejection of sovereign authority, even of elected assemblies, and the effective separation of the executive and legislative powers. The term constitutional government as used in this article refers to this set of principles. I do not undertake the futile task of defining constitutional government or the constitution of liberty, but I try to make its essential attributes clearer as my discussion proceeds. I use the terms constitutionalism and the constitution of liberty interchangeably with constitutional government.
Importance of the Third World
Some libertarians may question why we need to concern ourselves with the destinies of other peoples who in some sense have brought their condition on themselves and whose choices we have no right to interfere with or question. This question raises interesting philosophical issues that I cannot deal with here. I do maintain that coercive interference in the affairs of other countries can be justified only on grounds unequivocally and universally recognized by public international law, such as self-defense and the prevention of humanitarian catastrophe. Still, it is important to inquire what, if anything, can be done within liberal principles to encourage the economic and political transformation of countries toward the liberal ideal and what compelling moral and economic reasons exist for doing so.
The countries with the greatest institutional deficits are also the ones least capable of coping with humanitarian catastrophes, whether manmade or natural (Sen 1999). Democratically elected governments of the Organization for Economic Cooperation and Development (OECD) countries cannot ignore such catastrophes, nor should they. However, the upshot is that the taxpayers of these countries continue to bear the cost of the follies of other national governments. Catastrophes aside, the economic and political inhospitableness of these countries creates a welfare burden on the industrialized democracies through large wealth transfers in the form of aid and concessionary loans granted directly by developed countries and indirectly through international agencies, as well as through migration of persons fleeing destitution and oppression at home. Although compelling arguments exist for accepting such refugees, it is certainly much more desirable if people have no cause to flee their homes and if migration takes place voluntarily in an orderly and secure manner for mutual advantage.
It is hardly disputable that illiberal regimes are breeding grounds of international terror. My liberal Muslim friends argue persuasively that a liberal Saudi Arabia would not have engendered the al Qaeda movement. The costs of terrorist actions for liberal democracies hardly need itemization. The greatest cost inflicted by terrorism, however, is not in the lives and property lost (though these costs are horrendously unacceptable), nor in increased defense spending, but in the jeopardy of the rule of law that results from the extraordinary powers that the state gains in times of national emergency. Terrorists cause more harm to free societies through the reactions they precipitate than by the physical destruction they wreak.
A deeper reason to encourage the liberalization of the Third World is grounded in the very nature of the market economy and hence also in liberal constitutionalism. The term globalization is the popular catchword to suggest a new phenomenon. Though only recently discovered by the popular press and social commentators, this process has been coextensive with the emergence of the market economy from its misty origins. The market economy emerged in consequence of the growth of trade among strangers that gave rise to the institutions of private property, the sanctity of contract, and in general the extension of the protection of the law to all. Civilization as we know it is a result of increasing exchanges between individuals that consolidated tribes into larger communities and thence into cities, nations, and the international community. Thus, trade has brought peoples together progressively and enriched them economically and culturally through specialization and exchange, creating what Hayek termed the extended order of human interaction or civilization (1991, 39-47; see also Bauer 2000, 6). This civilization is an unfolding process that has bestowed great benefits, none so great as the rule of law providing security of life, liberty, and property. Yet more than half the world's population remains unconnected or tenuously connected to it although their integration into it would be an unqualified good.
Constitutional government cannot be legislated into existence or thrust upon a community. Its attainment and maintenance even in approximate form require appreciation of its nature, much hard work, and a great deal of good' fortune. As mentioned earlier, it requires intellectual acceptance of a particular conception of constitutional government, official adoption of this conception in the form of a national constitution, a supporting institutional substratum, and a favorable economic climate.
Prevalence of a Particular Conception of Constitutional Government
The proposition that the achievement of constitutional government requires its proper understanding may seem self-evident and even faintly tautologous. The fact, though, is that even in countries where constitutional government is relatively strong, a continuing struggle rages over what it takes to have constitutional government. I maintain that only a particular notion of constitutional government is self-sustaining in the longer term and that other notions, however fashionable today, give rise inevitably to conditions that even their present advocates fail to recognize as constitutional government in any meaningful sense. These faulty conceptions are, to borrow Hayek's expression, "roads to serfdom." Constitutional government as understood here requires its appreciation and acceptance by critical sections of the intellectual community--persons whose actions and decisions shape higher-order institutions as well as others who influence …