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Revolution。〃
But while the stakes in reform retail today are higher than ever； and countries know
it； one need only look around the world to notice that not every country can pull
it off。 Unlike reform wholesale； which could be done by a handful of people using
administrative orders or just authoritarian dictates； reform retail requires a much
wider base of public and parliamentary buy…in if it is going to overcome vested
economic and political interests。
In Mexico； 〃we did the first stages of structural reform from the top down；〃 said
Guillermo Ortiz。 〃The next stage is much more difficult。 You have to work from the
bottom up。 You have to create the wider consensus to push the reforms in a democratic
context。〃 And once that happens； noted Moises Nairn； a former Economy Minister of
Venezuela and now editor of Foreign Policy magazine； you have a much larger number
of actors participating； making the internal logic and technical consistency of the
reform policies much more vulnerable to the impact of political compromises；
contradictions； and institutional failures。 〃Bypassing or ignoring the entrenched
and defensive public bureaucracy…a luxury frequently enjoyed by the government teams
that launch initial reform measures…is more difficult in this stage；〃 Nairn said。
So why does one country get over this reform retail hump； with leaders able to mobilize
the bureaucracy and the public behind these more painful； more exacting micro…reforms；
and another country get tripped up？
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Culture Matters： Glocalization
One answer is culture。 To reduce a country's economic performance to culture alone
is ridiculous； but to analyze a country's economic performance without reference to
culture is equally ridiculous； although that is what many economists and political
scientists want to do。 This subject is highly controversial and is viewed as
politically incorrect to introduce。 So it is often the elephant in the room that no
one wants to speak about。 But I am going to speak about it here； for a very simple
reason： As the world goes flat； and more and more of the tools of collaboration get
distributed and com…moditized； the gap between cultures that have the will； the way；
and the focus to quickly adopt these new tools and apply them and those that do not
will matter more。 The differences between the two will become amplified。
One of the most important books on this subject is The Wealth and Poverty of Nations
by the economist David Landes。 He argues that although climate； natural resources；
and geography all play roles in explaining why some countries are able to make the
leap to industrialization and others are not； the key factor is actually a country's
cultural endowments； particularly the degree to which it has internalized the values
of hard work； thrift； honesty； patience； and tenacity； as well as the degree to which
it is open to change； new technology； and equality for women。 One can agree or disagree
with the balance Landes strikes between these cultural mores and other factors shaping
economic performance。 But I find refreshing his insistence on elevating the culture
question； and his refusal to buy into arguments that the continued stagnation of some
countries is simply about Western colonialism； geography； or historical legacy。
In my own travels； two aspects of culture have struck me as particularly relevant
in the flat world。 One is how outward your culture is： To what degree is it open to
foreign influences and ideas？ How well does it 〃glocalize〃？ The other； more intangible；
is how inward your culture is。 By that I mean； to what degree is there a sense of
national solidarity and a focus on development； to what degree is there trust within
the society
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for strangers to collaborate together； and to what degree are the elites in the country
concerned with the masses and ready to invest at home； or are they indifferent to
their own poor and more interested in investing abroad？
The more you have a culture that naturally glocalizes…that is； the more your culture
easily absorbs foreign ideas and best practices and melds those with its own
traditions…the greater advantage you will have in a flat world。 The natural ability
to glocalize has been one of the strengths of Indian culture； American culture；
Japanese culture； and； lately； Chinese culture。 The Indians； for instance； take the
view that the Moguls come； the Moguls go； the British come； the British go； we take
the best and leave the rest…but we still eat curry； our women still wear saris； and
we still live in tightly bound extended family units。 That's glo…calizing at its best。
〃Cultures that are open and willing to change have a huge advantage in this world；〃
said Jerry Rao； the MphasiS CEO who heads the Indian high…tech trade association。
〃My great…grandmother was illiterate。 My grandmother went to grade two。 My mother
did not go to college。 My sister has a master's degree in economics； and my daughter
is at the University of Chicago。 We have done all this in living memory； but we have
been willing to change 。 。 。 You have to have a strong culture； but also the openness
to adapt and adopt from others。 The cultural exclu…sivists have a real disadvantage。
Think about it； think about the time when the emperor in China threw out the British
ambassador。 Who did it hurt？ It hurt the Chinese。 Exclusivity is a dangerous thing。〃
Openness is critical； added Rao； 〃because you start tending to respect people for
their talent and abilities。 When you are chatting with another developer in another
part of the world； you don't know what his or her color is。 You are dealing with people
on the basis of talent…not race or ethnicity…and that changes； subtly； over time your
whole view of human beings； if you are in this talent…based and performance…based
world rather than the background…based world。〃
This helps explain why so many Muslim countries have been struggling as the world
goes flat。 For complicated cultural and historical reasons； many of them do not
glocalize well； although there are plenty of
exceptions…namely； Turkey； Lebanon； Bahrain； Dubai； Indonesia； and Malaysia。 All of
these latter countries； though； tend to be the more secular Muslim nations。 In a world
where the single greatest advantage a culture can have is the ability to foster
adaptability and adoptability； the Muslim world today is dominated by a religious
clergy that literally bans ijtihad； reinterpretation of the principles of Islam in
light of current circumstances。
Think about the whole mind…set of bin Ladenism。 It is to 〃purge〃 Saudi Arabia of all
foreigners and foreign influences。 That is exactly the opposite of glocalizing and
collaborating。 Tribal culture and thinking still dominate in many Arab countries；
and the tribal mind…set is also anathema to collaboration。 What is the motto of the
tribalist？ 〃Me and my brother against my cousin； me； my brother； and my cousin against
the outsider。〃 And what is the motto of the globalists； those who build collaborative
supply chains？ 〃Me and my brother and my cousin； three friends from chil