Bad Governance Leads to State Failure

When Countries Destroy Themselves

Something strange happens to governments. They get good information and make terrible choices anyway. Everyone talks about failed states. Somalia. Afghanistan. Syria. We picture chaos and violence. But that’s not where failure actually starts. It begins in quiet meeting rooms where officials make decisions. Smart people look at facts and choose stupidity instead. This kills countries from the inside out.

The Secret Everyone Misses

Most experts study the wrong things. They examine broken armies. They analyze collapsed economies. They interview angry citizens. These are just symptoms. The real disease lives earlier in the process.

Picture this scene. Intelligence officers walk into a room. They carry urgent reports. The information is clear and actionable.

Officials listen politely. Then they ignore everything important. Instead they focus on politics, elections, and personal interests.

This happens everywhere. Rich countries. Poor countries. Democracies. Dictatorships. The pattern stays the same.

A British Judge Figured It Out

Back in 1948, a British company sued the government. The case was called Wednesbury Corporation versus something boring. The House of Lords heard the case. That was Britain’s old obscure name for Supreme Court before they changed it to a real name. The judges created a simple test. When does government decision making become legally stupid? (unreasonable as they called it in Victorian English)

Arbitrary Decision: The Wednesbury case established that administrative decisions are arbitrary and become legally unreasonable when they involve:

1. Failure to consider relevant factors – systematically ignoring pertinent information that should inform the decision
2. Consideration of irrelevant factors – allowing extraneous political, ideological, or personal considerations to override rational analysis

This standard defines the threshold beyond which governmental decision-making becomes arbitrary and legally void. The test is not whether the decision produced good outcomes, but whether the decision-making process itself was reasonable.

This became known as the Wednesbury standard. Notice something important here. The test does not care about results. A decision might work through pure luck. The question is whether the thinking or decision making process made sense.

Historical Examples

Nixon’s China Opening (1972)

Despite public availability of Chinese strategic documents and school textbooks outlining long-term objectives, U.S. policymakers ignored relevant factors (China’s stated ambitions to replace American hegemony) while overweighing irrelevant factors (immediate symbolic gains over the Soviet Union). Michael Pillsbury, a key architect of engagement policy, has acknowledged this as a historic error that enabled a strategic competitor’s rise. USA failed to take into consideration the relevant facts.

The Israeli Yom Kippur War (1973)

Israel’s intelligence agencies, particularly the Mossad and military intelligence, had significant evidence that Egypt and Syria were planning a surprise attack. This included intercepts of communications, troop movements, and the evacuation of civilians from border areas.

• The Failure: The intelligence was dismissed by senior military and political leaders, who were operating under a flawed concept known as “HaKonseptsia” (The Concept). This core assumption held that Egypt would not attack until it had a modern air force capable of challenging Israel’s.
• Why It Was State Failure: The failure wasn’t a lack of intelligence; it was a failure of doctrine and mindset. The political and military leadership was so convinced of its own strategic superiority and the enemy’s supposed rationality that they couldn’t conceive of a surprise attack. They cherry-picked intelligence that fit their preconceived notions and ignored all evidence that contradicted them.

Israeli October 7 Intelligence (2023)

Israeli security services possessed detailed intelligence about Hamas attack plans, including a 40-page document outlining specific tactics. Decision-makers failed to consider relevant warnings while focusing on irrelevant assumptions about Hamas being economically deterred from major attacks.

Rwanda Showed the Pattern

In 1994, UN peacekeepers stationed in Rwanda got detailed warnings. Local sources reported weapons being distributed. Radio stations broadcast hate speech against Tutsis. The intelligence was specific. Observers knew where weapons were hidden. They understood the timeline. They could see genocide preparations happening. What did decision makers do with this information? They ignored it completely.

Instead they worried about domestic politics back home. American officials feared another Somalia situation. European leaders focused on election concerns. Nearly a million people died because officials could not process relevant information properly. The warning signs were everywhere. The decision making process failed.

America Made the Same Mistake

September 11th, 2001 shocked everyone. How could terrorists attack the most powerful country on earth? The answer is embarrassing. American officials had the information they needed. The FBI reported suspicious men learning to fly planes. The CIA identified known terrorists entering the country. On August 6th, 2001, President Bush received a briefing. The title was clear. “Bin Laden Determined to Strike in US.”

Intelligence agencies possessed relevant facts. They understood the threat. They could see the pattern developing. ut bureaucrats focused on turf wars instead. Agencies protected their information rather than sharing it. Political considerations trumped security analysis. The thinking process broke down completely. Nearly 3,000 people died as a result.

India’s Disaster

The 2008 Mumbai attacks killed 166 people. Terrorists arrived by boat and attacked multiple locations simultaneously. Indian security agencies had intelligence about the planned assault. They knew something big was coming. Sources provided specific warnings. But officials dismissed the relevant information. Instead they worried about political narratives and election considerations. The thinking process failed again. People died because decision makers could not focus on what mattered.

The bad decision making did not end there. It percolated into India’s economy which looked strong in 2010. Growth rates impressed everyone. The future seemed bright. But smart people were making incredibly stupid decisions behind closed doors.

Banks started lending money to anyone who asked. Risk analysis became a joke. Political connections mattered more than creditworthiness. The relevant facts were obvious. Loan defaults were climbing. Non performing assets were growing. Warning signs flashed everywhere.

Officials ignored these danger signals. They focused on growth targets and political promises instead. By 2014, the damage was catastrophic. At least ten major banks disappeared completely. Others had to merge just to survive. Prices doubled across the country. Unemployment hit double digits officially. The real numbers were probably worse.

The Nuclear Option

Then came something unprecedented in world history. On November 8th, 2016, India’s government announced demonetization. What does that mean? They cancelled most paper money overnight. These were the currency notes with face value above 100 rupee.  Suddenly, 86% of cash became worthless paper.

People could only exchange 4,000 rupees for immediate needs by producing identification. Everyone had to deposit their entire cash holdings in banks. The government asked citizens to use digital payment methods instead. That did not abate.

Lines stretched for miles outside banks. The economy seized up completely. Small businesses collapsed without cash flow. No major economy had ever tried anything like this before. It was financial shock therapy on an unimaginable scale. Actually the economy was placed in coma for 45 days.

Why did they do it? The financial crisis had become so severe that desperate measures seemed necessary.

The Domino Effect Explained

Here’s what really happened. Bad decision making created a cascade of disasters. First, officials ignored security risks. Then they ignored banking risks. This created massive debt problems. Banks started failing one by one.

Then inflation spiraled out of control. When banks can’t function properly, money becomes unstable. Prices rise across everything. Unemployment followed naturally. Broken banks stop lending to businesses. Companies cannot expand or even survive. Jobs disappear. Each failure made the next one worse. The spiral accelerated until radical action became unavoidable. This is how decision making failure spreads through entire systems like poison.

This pattern keeps repeating across different countries and different types of crises.

The Russian Invasion of Ukraine (2022)

In the lead-up to the invasion, U.S. intelligence publicly shared detailed information about Russia’s troop movements and invasion plans. However, many European countries and some policymakers initially doubted the U.S. warnings, believing that a full-scale invasion was too irrational. The information was there, but the willingness to accept the reality was not.

Why Smart People Choose Stupidity

The psychology here is fascinating. Officials are not usually incompetent. They have good education. They understand complex issues. So why do they consistently make terrible choices?

The answer lies in incentives and pressures. Politicians worry about elections. Bureaucrats protect their careers. Everyone focuses on short term survival. Relevant facts often point toward difficult decisions. Acknowledging problems requires admitting mistakes. Taking action might hurt politically.

Irrelevant factors seem safer. Political calculations feel more controllable. Personal interests are easier to understand than complex policy challenges. The system rewards bad thinking over good analysis.

Venezuela’s Collapse

Consider Venezuela twenty years ago. They had massive oil wealth. The economy was sophisticated. Institutions functioned reasonably well. What happened? Officials started ignoring basic economic principles. They focused on political control instead of sound policy. Relevant indicators showed currency problems developing. Inflation was beginning to accelerate. Oil dependency was creating vulnerabilities.

Leaders dismissed these warning signs. They concentrated on maintaining power through popular spending programs. The result was complete economic collapse. Hyperinflation destroyed savings. Millions of people fled the country. A rich nation turned into a failed state through consistently bad decision making. Bad decision making is bad governance.

Lebanon’s Banking Crisis

Lebanon was once the financial center of the Middle East. Beirut rivaled Dubai for banking sophistication. The system seemed stable and profitable. But behind closed doors, officials were making increasingly reckless choices. Banks were lending to the government at unsustainable rates. The currency peg was becoming impossible to maintain. External debt was growing beyond any reasonable limits.

The relevant facts were clear to anyone paying attention. International economists issued warnings. Local experts raised concerns. Officials ignored these inconvenient truths. They focused on maintaining the illusion of stability instead. When the system finally collapsed in 2019, ordinary citizens lost their life savings. The banking sector simply disappeared overnight.

Sri Lanka’s Recent Disaster

Sri Lanka provides an even more recent example. In 2019, the country seemed stable and growing. Tourism was booming. The future looked promising.

Then officials made a series of catastrophically bad decisions. They banned chemical fertilizers overnight. They cut taxes while maintaining spending. They printed money to cover budget deficits. Agricultural experts warned about the fertilizer ban. Economists predicted the tax cuts would create deficits. Everyone could see inflation starting to accelerate. Officials dismissed these relevant concerns. They focused on political promises and ideological commitments instead.

By 2022, the country had collapsed completely. The president fled by boat. Citizens stormed government buildings. The economy simply stopped functioning. India infused 4 billion USD into economy of Sri Lanka and it turned around in a few years.

The Legal Standard Nobody Uses

The Wednesbury test gives us objective criteria for evaluating government decisions. Did officials consider relevant factors? Did they focus on irrelevant concerns instead? This standard works across different political systems. It applies to democracies and dictatorships equally. Rich countries and poor countries face the same test.

The beauty of this approach is its simplicity. We do not need to argue about ideology or culture. We can ask straightforward questions about information processing. Were important facts considered seriously? Were trivial political considerations given excessive weight? Was the decision making process itself reasonable?

These questions cut through political noise and focus on what actually matters.

Early Warning Signs

How can you spot decision making failure before disaster strikes? Watch for systematic patterns in how officials handle information. Do they routinely dismiss expert advice? Do they attack messengers rather than address problems? Look at what gets discussed in meetings versus what gets ignored. Are long term consequences considered? Do political calculations dominate everything else?

Pay attention to how dissent is treated. Are alternative viewpoints welcome? Or do officials surround themselves with people who agree with everything? These patterns appear years before visible collapse occurs. The thinking process fails long before institutions break down.

Singapore Does It Right

Some governments actually get this right. City State of Singapore provides an excellent example of reasonable decision making processes. They hire the best talent regardless of political connections. Merit matters more than loyalty. Competence trumps ideology.

When evidence suggests a policy is not working, they change course quickly. Pride does not prevent adaptation. Political embarrassment matters less than good results. They systematically consider long term consequences of current decisions. Short term political gains do not override careful analysis.

This is not about being perfect. Singapore makes mistakes like everyone else. But their thinking processes are much more reasonable than most governments.

Switzerland’s Consensus Building

Switzerland takes a different but equally effective approach. Their consensus building system forces consideration of multiple perspectives.

Before major decisions get made, all stakeholders must be heard. Relevant factors get thorough examination. Different viewpoints receive serious consideration. The process is slow and sometimes frustrating. But it prevents the kind of group-think that destroys other countries.

Political theater gets minimized because everyone knows they need to work together afterward. This creates incentives for reasonable behavior.

Denmark’s Evidence Based Approach

Denmark prioritizes data over ideology in policy making. Expert advice gets serious consideration rather than political dismissal.

When research shows a policy is not working, they adjust quickly. Academic studies influence decisions more than opinion polls. This creates a culture where relevant information matters. Officials compete to provide better analysis rather than more popular positions.

The results speak for themselves. Denmark consistently ranks among the world’s best governed countries.

Why This Matters More Now

Decision making failure is accelerating worldwide. Information moves faster than ever before. Consequences arrive more quickly. Mistakes compound at unprecedented speed.

Social media amplifies irrelevant factors while drowning out careful analysis. Political polarization makes objective assessment nearly impossible. Everyone retreats into ideological bubbles.

The stakes keep rising too. Nuclear weapons exist in more hands. Climate change creates unpredictable challenges. Economic systems connect globally in complex ways. Small decision making failures can trigger massive disasters that spread across continents within days.

The COVID Example

The COVID pandemic showed these patterns playing out in real time across multiple countries.

Epidemiological data was clear from early 2020. The virus spread rapidly through respiratory droplets. Social distancing and masks would slow transmission. Vaccines would eventually provide protection. Different governments processed this information very differently.

Some countries focused on the relevant scientific evidence. They implemented effective public health measures. They prepared healthcare systems appropriately.

Other countries dismissed expert advice. They focused on economic concerns or political considerations instead. They downplayed the severity to avoid difficult decisions. The results were dramatically different. Countries that followed the evidence saved lives. Countries that ignored it suffered much higher death rates.

The same information produced completely different outcomes based on thinking processes.

Afghanistan’s Collapse

The 2021 Afghanistan withdrawal provides another recent example. Intelligence reports clearly indicated that Taliban forces were much stronger than officially acknowledged. Ground commanders warned that Afghan security forces would collapse quickly without American support. CIA assessments predicted rapid territorial gains by insurgents.

But political leaders had already committed to withdrawal timelines. They ignored relevant military intelligence. They focused on domestic political promises instead. The result was chaos that shocked everyone who had been paying attention to irrelevant factors rather than ground truth.

Brexit’s Information Problem

Brexit negotiations demonstrated similar decision making failures. Economic analyses clearly showed the costs of leaving the European Union. Trade experts predicted supply chain disruptions. Financial analysts warned about currency instability. Diplomatic specialists highlighted international relationship challenges.

But political leaders dismissed these concerns as “project fear.” They focused on sovereignty rhetoric and campaign promises instead. The relevant facts were available. The thinking process simply could not handle them properly.

Climate Policy Failures

Climate change provides ongoing examples of systematic decision making failure. Scientific projections are clear and consistent. Temperature rise will create massive economic and social disruptions.

The relevant information has been available for decades. Climate scientists understand the mechanisms. Economists can calculate the costs of inaction. But political leaders focus on fossil fuel industry interests instead. Short term economic concerns override long term survival calculations. This represents decision making failure on a civilizational scale.

The Fix Nobody Wants

The solution is actually straightforward. Create systems that force consideration of relevant factors. Build institutions that resist irrelevant political pressure. Make dissent safe and rewarded rather than dangerous. Train officials to recognize their own biases. Establish processes for challenging comfortable assumptions.

This requires changing incentive structures. Officials must be rewarded for good thinking rather than popular positions. Long term results must matter more than short term survival. Most importantly, citizens need to understand these patterns. Voters should demand reasonable decision making processes rather than just agreeable conclusions.

Why People Resist This

Many readers will resist this framework. It suggests that disasters are more preventable than we usually admit. It implies that officials chose failure rather than being overwhelmed by circumstances. This is uncomfortable because it makes us responsible for fixing the thinking processes that create disasters. It’s easier to blame external forces or complex situations. It’s more comfortable to treat failure as inevitable rather than chosen.

But the evidence is overwhelming. The same patterns appear across different countries, different time periods, and different types of crises. Bad governance creates state failure through predictable mechanisms. Good governance prevents it through equally predictable processes.

The Choice We Face

Every country faces the same fundamental choice. Focus on relevant information or get distracted by political noise. Build reasonable decision making processes or watch everything collapse eventually.

The Wednesbury standard gives us objective criteria for making this distinction. The historical examples show us what happens when we get it wrong.

The legal framework provides enforceable standards for governmental conduct. The cascade effects demonstrate why this matters so urgently.

Bad governance leads to state failure. Good governance prevents it. The tools for telling the difference already exist.

Now we just need the courage to use them consistently.