It's the mismatch. Honor and reputation work for small high-trust societies where everyone knows each other, but a nation state (not to mention a global economy) requires more robust enforcement mechanisms.
On honor: It is that you can't really kick someone out of a nation state. In a smaller society, when you are dishonored, you leave the group. In a nation, you can't really do that, so we have made up ways to do so in a half way, namely prison. Honor doesn't really work in a nation state. Brett McKay has a lot to say about honor in the modern world starting here: http://www.artofmanliness.com/2012/10/01/manly-honor-part-i-...
They took away my family's right to vote in Pakistan. I think you can come up with plenty of ways to kick people out of a nation state short of making them stateless (which I guess isn't kosher after WWII) I suppose another good example would be the Rohingya in Myanmar
