. . . Despite the promise of such havens, an important difference should not be taken for granted.
First-world governments gain legitimacy from the illusion that they actually do good. As has been observed many times, no government can survive without at least passive consent from the governed. The political class is aware of this, intuitively if not explicitly. When they want to exercise their considerable capacity for violence against a threat, say, against the threat Bitcoin poses to their money monopoly, they weigh it against the risk of revealing their true malevolent selves to the public. They must tell a good story or else rely solely on covert violence which bears its own risks.
By contrast, second and third-world governments gain legitimacy from their imitation of first-world institutions. Their publics admire first-world wealth and give passive or explicit consent in exchange for their government’s albeit imperfect imitation its first-world counterparts. Secular democracy is the correct system as evidenced by the wealth of the first world, and the main question among the politically conscientious is how to best achieve it, or more precisely, how to elect politicians who will bring it about.
For those of us who’ve lived in what are sometimes called “emerging economies,” the spectacle is pathetic indeed: bad ideas imitated poorly. Economic actors don’t know whether to celebrate the alternate avenues to commerce offered by the corruption rampant in such societies, or mourn the stagnant, fetid, cesspools of bureaucracy and predatory legal systems from which there is absolutely no “clean” escape. . . .