What has Politics got to do with it?

Almost a decade ago when DFID began works on “drivers of change” politics and the political economy did not exist in donor discuss.  Recently, international communities and donors are paying more attention to politics as it relates to development and this is shaping aid/donor discuss. Politics continues to lie low underneath the exterior of such discussion however; the emergence of “fragile states” raises questions such as; what can be done about weak government in poorer countries? The primary assumption is still that the obstacles to better governance and boasting development performance are primarily economical, administrative and technical subsequently, that progress can be made through improved or enhanced policies, capacity building, and citizenship participation and decentralized governance.

The OECD and the likes of the World Bank are beginning to understand that besides economic growth and technicalities, politics could stifle development process. In reality there is a disconnect between the rhetoric about politics and the typical operational agenda as donor discuss is still centered on political reforms and market interference without paying much attention to the political processes involved in building strong and effective public institutions and how incentives can be aligned to promote productive use of resources, although donor are beginning to discuss the politics of development, there appears to be little evidence that it is prompting them to focus on how development happens and why politics is vital. New programmes are being developed to support political parties in Latin America; state led political analysis is informing DFID initiatives in Nigeria (Utomi et al., 2007).

Why is this important?  There is a general consensus that where agencies have conducted political analysis there appears to be a tangible increase in the scope and quality of internal debate reflecting greater impact awareness of developmental politics. The key impact of political analysis is most vital at a sector level where it is beginning to challenge conventional models of how development happens and also making it apparent that politics is not just an obstacle to overcome in the process of development but rather an integral part of the search for a way forward.  The British government’s 2006 White paper opens with a bold assumption that politics determines how resources are used, how powerful the elites are and how policies are made. Also that politics determines who benefits from such resources allocation and policies, in summary “good governance” is all about good politics period.

Obviously these two; ‘politics’  and ‘processes’ of development correlate as bureaucrats often confines perspectives to align with what they think the market will bear, forgetting that markets are just markets and if the conditioning’s (political environments) are made right history can repeat itself. It is important because (a) poor analysis leads to deformed solutions; (b) it is vital to acknowledge that it is impossible to make significant changes in governance and that attempting to achieve the MDGs without political transformation will backfire; (c) approaching development more from a political perspective is key to seeing where there might be unorthodox room for improvement and (d) without the conviction that politics is central to development and that understanding local political dynamics is key, agencies cannot make necessary adjustment in their strategies.

Barriers to Politics

The propositions that development challenges are essentially political seem obvious so what is preventing politics from taking a front seat? Clearly donors are not blind or unaware of how politics interacts with development, but the dynamics of the environment that these factors operate in values optimistic action as opposed to reflection on reality, and focus heavily on debt repayment, economic growth at all cost and technical issues. This brings four main issues to light;

  1. Getting people to take politics seriously requires them to change preconceived notion of how development take place. The question remains how can citizens who already feel sidelined be encouraged to participate and take politics seriously? what are the incentives to encourage this kind of result?
  2. There is a need for strong and effective institutions; the apprehension of the relevance of institutions has prompted the reassessment of the role of the state from an economic acceleration perspective. The World Bank(1989) ascertains that the major cause of underdevelopment in Africa is as a result of poor governance; indicating that the Africa states are unable to channel political power to managing state affairs and managing  resources. Acemoglu (2005) argues that both a powerless and toxic states can stifle investments opportunities thus growth, and that the aim of the OECD countries has been to develop a combination of politically weak but economically strong (i.e. high tax) states, which is to their advantage. This is reminiscent of Michael Mann’s (1993) differentiation between the despotic and the infrastructural powers of the state, with despotic powers referring to the ability to use force and infrastructural powers defined as the ‘capacity of the state to ingress the civil society, and to implement logistically political decisions throughout these realm’. The extraction of resources (human or material) from society is a key element of such infrastructural power. Social, economic and political institutions overlap and affect developmental outcomes. Thus, developmental success is predicated on negotiating institutional arrangements. The argument is that in theory, all state has what it takes for industrial take-off however, in practice, strong efficient capacity (institutions) needs to be established to engineer and regulate growth and development processes.

3. The undefined powers that lays in the role of the elites; the impact that elites have on growth and development can often go unnoticed and exceeds their actual representation within society. This disproportionate impact stems from their control over the productive assets and institutions, which enables them to influence both the allocation of resources and the allocation of authority. The ownership of resources enables elites to impact growth in two ways.  The most direct is through their decisions over resource allocation.  They can choose to redistribute resources in ways that increase employment, economic efficiency, and reduce income inequality. Or alternatively, they can act as rent-seekers and direct resources towards their social groups.

In addition, their control over resources also gives elites the ability to make decisions over production and technology. The owners of the factors of production have influence over what is produced and how it is produced.  They can act as entrepreneurs and innovators and increase factor productivity and diversification. Or they can overexploit existing resources without regard for sustainability into the future; this in most cases is the situation especially in West African countries.

Elites also impact development outcomes through their control over decision-making processes that allocate political resources within a society. This introduces two additional channels through which their activities impact growth in the long run.  The first is that elites have the resources to design and implement institutions that favor their interests. Such institutions may promote participation and information flow.  Or they may simply cement the position of a particular group within the governance structure.

Another feature of elite control over institutions is that they are able to influence how both elites and non-elites within a society perceive different issues. Elites control how issues are framed through their ability to distribute or withhold information, and their influence over and within the media.  Even where there is a free media, it depends on elites for information, and can choose to present issues that reflect a particular bias.

The extent to which these channels are used for social or personal welfare gain varies among societies. But the fact that these channels exist in every society highlights the fact that if elites can be induced to adopt developmental behavior, it can have a disproportionately positive impact on growth and development; the essential question is how? *seeing that underdevelopment favors them*.

4.     Providing Incentives to Capturing Elites for Development

The benefits of bringing the objectives of elites in line with national objectives are obvious.  But the extent to which this is possible and the levers to use to do so depend on what makes elites developmental. On the one hand, it might be that there is some inherent characteristic of some sectors of the elite that makes them different from predatory elites.  On the other, it could be that elites who have been positive forces for development were responding to incentives that made them developmental. Understanding which of these the correct perspective is is important for understanding not only domestic elites in developing countries but also the international elites who are building institutions that embed their preferences into the workings of the international economy.

There is little evidence to support the contention that some elites are naturally more developmental than others ulterior motives could be lurking around the corner i.e. the way elections are sponsored in most developing countries questions this notion.  This is particularly important given the design of international governance structures which incorporate the assumption that there are fundamental differences between the elites of developed and developing countries. There is little to suggest, for example, that the objectives of elites in OECD countries are relatively more altruistic and that the institutions designed by such global elites focus on generating global public goods to a greater extent than would be true if the institutions were designed by alternate elites. For example, though institutions such as the WTO can play an important role in sustaining international trade, they can at the same time play the role of distributing the rents towards developed countries, and by taking too simplistic a view of the nature of comparative advantage can impede socially desirable policies in poor countries. Thus an important element in the design of international governance structures is the perpetuation of the preferences of rich country elites.

Given these observations, the answer to the question of how elites can play a positive role in development needs to focus on how to create the incentives that will lead elites to act in a developmental way. There are three considerations that can direct the process of building incentives without recommending specific institutional forms.

The first step to creating incentives for elites to incorporate social welfare into their activities is to understand the source of elite influence.  Elites that draw their status from the ownership of resources will react differently than elites that draw their status from political influence.  The proper incentives will be adjusted to the source of power.

The second step is to identify how elites interpret the need for development in society.  For some elites, the volatility caused by poverty may create incentives for them to support development, for example by inducing them to disburse some of their influence to other groups in society.  For others, development may be a threat which induces them to try to capture as much rent as possible before they lose power.

A third step is to look at how elites translate the interests of their constituency. Elites are a decisive group within their society, and there is evidence that leaders of political parties and unions are often more tolerant of reform and change than the masses they represent. Incentives need to reflect this.

The time is right for exploring divers partnership that are not only based on externally driven agenda but rather focusing on a much better understanding of the political economy of donor and recipient and essentially causes of bad/weak governance could be a good starting point.

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About rebeccaidd

Fun, passionate, inquisitive exploring development
This entry was posted in Economic Growth, Politics, Poverty and tagged , , , , . Bookmark the permalink.

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