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The Political Economy of Development Success

Scholars and aid donors increasingly recognize that a country's development pathways are determined less by the technical correctness of its policies than by its political economy conditions, and specifically the nature of its main political settlements or agreements among elites.[1] For Bangladesh, it has been convincingly argued that sustained, broad-based development was the fruit of an elite agreement to enable economic growth through openness to global markets, accepting that even political opponents would need to be able to benefit. Khan (2013) shows how the institutions and incentives to make growth possible emerged after its initial 'failed populist authoritarianism' generated political crisis and anarchy following an all-out grab for national resources by politically connected elites in the early 1970s. The idea of a political settlement on growth through business-friendly policies is backed by the simple fact that more than half of Bangladesh's Members of Parliament had business or industry as their primary occupation throughout most of the 2000s (Jahan and Amundsen 2012; Jahan 2015).

Hassan (2013) argues that the elite agreement to let growth happen was one of three lower-level bargains on which the overall political settlement rested. The second was an unstable but occasionally functional agreement on the rules of the political game that emerged out of the fifteen years of military rule (1975-90). This was to adhere to multiparty elections and democratic competition to share political power, in order to gain the internal and external legitimacy of an elected regime. The elite took this so seriously, even while recognizing their own inability to police themselves and their faction followers, that for more than a decade after 1996, a non-party caretaker institution was constitutionally mandated to oversee political transitions. The third bargain was a 'social provisioning contract', in which the state committed to at least basic service provisions for the masses. This 'triple-lock' political settlement, Hassan argues, is the key to Bangladesh's relatively inclusive development success (Hassan 2013).

While these accounts of the political settlement are correct in essence, both grant somewhat too much autonomy to the elite. Both neglect the relational and negotiated nature of the political settlement and the role of both external actors and the Bangladeshi masses in their explanations. To the extent that the broad-based growth pathway adopted by Bangladesh after its brief and disastrous flirtation with state 'socialism' was pro-poor, they do not convincingly explain why the elite needed this to be the case. This book shows how the political fallout from the 1974 famine, hard on the heels of the 1970s cyclone (the neglect of which turned popular opinion against West Pakistan rule), reasserted the social contract between rulers and ruled. It put in place a contract of basic protection against the ecological disasters and global economic volatilities to which the rural proletariat had been exposed for at least a century (Bose 1986). That contract in turn depended on an agreement with the international community to provide the aid resources and knowhow needed to transform the population in order to prevent subsistence crises along the lines of 1974 (or 1970, 1943, etc.).

In signing up to aided development Bangladesh was required to open itself not only to global markets, but also to a range of experimental policy and programmes in the name of poverty alleviation. Both Khan and Hassan implicitly assume that choices of the pathways of development were clear- cut and given, and that ideas played no important role in how interests were conceived and institutions evolved. But there are reasons to believe that the motivations for going down this path included not just growth, but an inclusive, labour-intensive variant of the model. This was the obvious choice from a limited menu, but acutely low levels of human development meant it was not necessarily easily achieved. Ideas about development matter in their own right, and Bangladesh has hot-housed and showcased many. This is both because its options were initially so limited that new ideas urgently needed to be tested in this difficult environment and because in opening itself to aid and development, Bangladesh found itself exposed to a rapid and rich traffic in liberal development thought and practice. Both the relationships within which the elite found themselves and their ideas about the appropriate models of development mattered to how the political economy functioned.[2]

  • [1] See Di John and Putzel (2009);Khan (2010);Laws (2012).
  • [2] Following Hickey's critique of political settlement theories in relation to developmentoutcomes (Hickey 2013).
 
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