Saturday, April 26, 2014

The Role of the State in Development Politics

The Role of the State in Development Politics

Last week we looked at the interplay between the two key concepts of Democracy and Development, this week the topic is specifically the role of the state itself in development, regardless of the form of government.

States as viewed by history

Through the course so far we have examined the various theories of development and how they have changed over time. What that has shown is how the focus of the development community on the State has changed with time, with the emphasis placed on its importance ebbing and flowing. 

Going back to Modernisation Theory in the 50's and 60's and the State was the all-important factor that drove development. However, as neo-liberal theories became the favourites of the development crowd, the State took a backseat, with economics pushed to the fore. However, it is obviously impossible to remove the state from the equation completely, which leads to the question, asked by Maureen Mackintosh - "What is wrong with the state?"

Mackintosh brings a number of definitions into the argument, including the definitions of private interest vs. public interest states. Private interest states are those that follow the neo-liberal, market-based approach to government. Public interest states believe that they can assess the needs of their citizens and implement institutions to fulfil those needs. Both approaches bring different problems and different perceived advantages.

What Mackintosh also does is show how the State apparatus itself can cause problems, specifically in that the State, inevitably, is made up of people and that people are infallible. This leads to problems with corruption, rent-seeking and bureaucracy and other inefficiencies or issues.

In bringing these ideas into focus, Mackintosh introduces us to one of the current trends in development - the need to cut the bloat of the state. Excess bureaucracy is seen as a way of hiding corruption and inefficiencies - so developing countries are being pushed to cut the size of the State in various ways.

Getting to the source of the problem

One of the readings I really enjoyed in this module was the one by Mick Moore - "Political Underdevelopment: What causes 'Bad Governance'". Moore takes the position that a lot of the issues for state's comes from the source of their income - whether it is "earned" (i.e. tax revenue) or "unearned" (i.e. from foreign direct investment or aid).

I found this a fascinating article, not least because the theory seems to make a lot of sense to me. Moore draws direct consequences from the fact that governments are not beholden to the electorate, giving them the ability to ignore citizens demands, or pay them off with a small percentage of their unearned funds.

There were a number of points that really hit home for me in this article and I've tried to summarise them below:
  • An effective system not only allows for revenue collection, but also provides a great deal of information about a state's citizens - if we make the assumption that in order to have an effective democracy you need to be able to collect revenue, which is Moore's theory here, does that mean that in order to have democracy we have to trade some of our freedoms in terms of the State's knowledge of us?
  • Coups are less likely in a State financed by taxes - Moore's theory is that this is because it is a harder source of income to take over, i.e. that proceeds from an oil field or diamond mine can be easily subsumed by an armed force. I remember a fact from an earlier module that there has never been a civil war in a full democracy, I wonder if that is the case also for a regime that collects more than a certain percentage of revenue from "earned" sources?
  • Aid agencies can be destructive in this environment - Moore claims that due to the fact that donor agencies are individualistic, that States have multiple masters, each with different aims and different targets, which will sometimes compete. This allows the governments to always claim they are working towards their targets and potentially always have an excuse for not hitting them.....while still getting funding!
This way of thinking obviously emphasises the differences between States that have a bounty of natural resources vs. those that don't, as this is the most common form of unearned income.

What makes a state "developmental"?

The "developmental state" is an interesting concept. Effectively defined by having a government that is trying to accelerate development either by explicitly or implicitly encouraging development. The reading by Lockwood in particular looks at a number of developing states in Africa (Botswana, Ghana, Tanzania, Uganda and Mozambique) and why they are classed as ahead of their peers on the continent - as well as examining whether the picture in these states is really as positive as some would have us believe.

African nations seem to be particularly prone to clientelism - the practice of delegating power to actors in reward for their loyalty and service. Lockwood paints a picture of states bogged down in these practices and of supposedly developmental states eventually succumbing to the same bad habits of their neighbours. 

In each country he examines, the power of the individual ruler seems to have been a driving force behind the development drive. In addition, the actual amount of development seems to be unfortunately quite low, with real gains being experienced by the privileged few, who are lifting the national average without really raising the bottom rung.

This section was actually quite depressing for me. I wondered if Lockwood's was an isolated point of view, but then found similar recent pieces on Burundi, Venezuela and Rwanda. It seems that even in States where there is a strong leader, committed to change, with a democratic basis of government, an improving economy and strong civil society, that the same problems keep re-surfacing. I guess if there's one small thing to be thankful (?) for it's that this is not just a problem for developing countries.

Leftwich and the primacy of politics

I found Adrian Leftwich's article on the primacy of politics a stimulating read. Perhaps unsurprisingly, Leftwich himself acknowledges that his is an unusual position, I was hesitant at the start about the theory - in the modern day we tend to think of politics=politicians=untrustworthy. So, I couldn't see how definitive actions could be put in place to create a developmental state via politics.

Leftwich's overall claim is that donors should be putting their efforts into developing the politics that will strengthen the social forces that can create growth. I find particularly compelling his idea that we have to try to prevent politics based on patronage and find common ground to form interest groups. Politics based on race, origin and religion are, in my mind, destined to breed conflict as there can never be compromise - all are absolutes.

Where I found the ideas less coherent was over his identification of four factors common in development states:
  • External threat
  • Coalition of internal elites
  • Concentration of power / continuity of power
  • Developmentally driven institutions
Firstly, his definitions for each of these is so overly broad that you can make a claim for just about any country to be included. There is also no assessment of countries that fall into these categories but that weren't classed as development states, although his generic last category is a bit of self-fulfilling prophecy I suppose!

What I found extremely interesting were some of his conclusions from this - namely that the bureaucracies in these states were well trained and highly competitive, while the economic institutions were insulated from outside pressures. Reading the article by Evans and Rauch on which this assertion is based, I'm not convinced as the data seems to be heavily weighted on the East Asian countries included in the sample: Singapore, Taiwan, Hong Kong and Korea. I have read on a number of occasions now about being careful to not allow these countries to dominate the thinking on development - here I fear is a case of them dominating the data to a large extent.

I actually don't think this invalidates Leftwich's theory though - it shouldn't hang on whether the civil service is particularly well educated / trained. The central theory is that countries develop more quickly due to stronger civil society - not a more efficient bureaucracy.

Why Nations Fail

The final reading of the module was one that I thoroughly enjoyed. Part of a recent book by Daron Acemoglu and James Robinson, Why Nations Fail is definitely going on my reading list!

There are a lot of similarities in this piece with the Mick Moore article from earlier in the module. In both instances, the authors present a single variable, fairly simple approach to what helps drive development and what doesn't. Whilst Moore identifies the source of a state's revenues (earned vs. unearned), the authors here look at the type of politics in a state - inclusive vs. exclusive. I.e. is the government listening to its citizens and adapting policy based on their demands, or dictating to them?

I thought the chapter we were asked to read was extremely good for a number of reasons, but again there were a few key concepts that struck home with me:
  • Property rights - one of the key principles that is identified is that Inclusive governments promote the protection of property rights. For me, working in technology, this is especially interesting due to the the tangential subject of Intellectual Property. IP law is meant to encourage innovation in the same way that property rights is meant to - which the authors see as a key driver of economic growth. Western governments have undoubtedly (under pressure from MNCs) restricted IP over the last few decades and I wonder if a more inclusive approach to IP will be one of the areas in which developing nations can catch up in the future. If that was to be the case, would developed nations be able to turn the ship around quick enough to avoid being overtaken?
  • The attempts to put China's growth into perspective - this particularly resonated for me due to seeing Martin Jacques talk at a recent event. There, Jacques was arguing that the autocratic regime in China was the best form of government for now. That doesn't fit with my thinking as, although I recognise that the recent Chinese governments have done a good job of managing the economy, I believe in the power of the free markets. The argument that the authors make here, that China is simply catching up quickly, but will be unable to sustain this performance without moves to a more inclusive government.
  • Foreign aid - I suspect most people taking the course will have more than a passing interest in foreign aid. Either through donations or through having actively participated in foreign aid programs. I am no different. I thought this section, although accurate in its account of inefficient use of aid resources, was slightly misplaced. The answer here is not that inclusive politics will make foreign aid more efficienty - that is a different problem, but that the resources are directed in the wrong areas.
  • Technology and the media - again, this last section resonated particularly with me because of my IT background. The prevalence of IT and communications technology across the world is growing and with it the effort and cost for a government to control information. Ironically, as with the IP laws, the West actually seems to be regressing in these areas, with the Snowden affair highlighting how much these governments actually can control. However, I suspect that in developing countries, the distribution of knowledge and communications tools will ultimately prove to be a major factor in the overthrow of many exclusive governments.


Following this module I definitely have more of a feel for the impact that a State can have on development. It feels that there are obviously a number of factors beyond the powers of the State that influence its ability to create a developmental state, but that there are also a number of things that the State can do to apply the handbrake to development if not properly considered.

No comments:

Post a Comment