The Theory of Second Best: Part Deux

Haiti, the poorest country in the western hemisphere, was recently devastated by a massive 7.0 earthquake. An earthquake of this size would cripple even the most modern nations, let alone Haiti. This recent catastrophe has many people and governments eager to help. However, a crucial question needs to be asked: after receiving millions of dollars in foreign aid each year with nothing to show, is the "Haitian model" sustainable? Or does it need to be done away with altogether? 

 Peter Leeson and Claudia Williamson argue in a paper that, 

Many predatory governments do more to damage their citizens’ welfare than to enhance it. In light of this, we show that conditional on failure to satisfy a key institutional condition required for ideal political governance—constrained politics—citizens’ welfare is maximized by departing from the other conditions required for this form of governance: state-supplied law and courts, state-supplied police, and state-supplied public goods. Since departing from these conditions produces anarchy and fulfilling them when government is unconstrained producers predatory political governance, anarchy is a second best.

The main reason for the lack of development Haiti is because the government fails miserably at doing exactly what it is supposed to do: protecting the rights of others.