In the fifth installment of the Future of Development series, which brings together experts to discuss the big questions facing developing countries over the next decade, Leonard Wantchekon and Sarah Khan took on the role of politics in development (and vice versa), exploring how political distortions impact the economy and how economic change affects politics.
Leonard pointed out that research into African development has often landed on “deep” or long-run factors that constrain progress, whether these are the extractive institutions left by colonial powers or the ethnic divisions that undermine progress or increase the likelihood of conflict. But this discourse ignores the recent convergence both in incomes and institutional quality between Africa and richer countries. He argued that to understand this, we need to look at the role of much more fluid and changeable political arrangements and equilibria. Specifically, what political distortions—whether driven by voters, politicians, international forces, or other players—affect development and economic outcomes, including economic growth and consumption, debt profiles, technological innovation, and firm productivity? There are three main distortions, he argued—patronage, contract enforcement, and state capture—which empirical research shows generate welfare losses.
Against this framework, Leonard laid out three sets of policies to address these political distortions and achieve better development outcomes. First, pursue state reform that makes government more transparent, exposes the connections of politicians and bureaucrats, and improves the quality of supply of new politicians. Second, implement campaign finance reforms to regulate and limit corporate donations, both domestic and international, to limit the extent of state capture. And third, implement technologies to improve the effectiveness of the state, particularly for service delivery. Collectively, he argued, these reforms would ameliorate the political distortions that have had such a deleterious effect on the economy.
Sarah Khan examined the gender dynamics of political participation in developing countries, building on a 2003 experiment by Leonard on clientelism and voting behavior in Benin. There are multiple arguments for improving women’s political participation, she said: the instrumental (“better women’s representation will improve governance”) as well as the normative (“equal representation is intrinsically important”). In development it’s common to focus on the former argument for women’s representation, framing it as a solution to political problems—despite the fact that the evidence case for that is mixed. Sarah argued for the normative, rights-focused rationale although warned that it’s still open to manipulation, as in how autocratic regimes have used gender quotas in government as low-cost “window dressing” to improve their reputations abroad.
Shanta kicked off the discussion with a challenge: in places where there is a stable equilibrium that has resisted political reform, how can we ever overcome those entrenched forces? Leonard recognized this difficulty and argued that it spoke to the importance of mobilizing voters, NGOs, and political parties to demand institutional reforms to improve welfare. We should also be wary of placing the blame for political distortions on voters, he argued, and attention must be given to the actions of firms and corporations while political information provision must be organic.
Shanta also pressed both speakers on how external actors can influence political patterns in developing countries, if indeed they should at all. Sarah argued that outside intervention can generate a politics of its own which can lead to even worse outcomes. Leonard suggested that it is possible for outside parties to intervene politically to address distortions without being partisan, but Sarah warned that thinking any development is apolitical is an illusion. Finally, Sarah pointed out that that the canonical examples of success in political gender equality, welfare states like Sweden, recognized and corrected for inequalities in the household division of labor as the root of political inequality; the roots of political inclusion run deep.
We continued the discussion of gender at another installment of the Future of Development series, “India and Working Women” featuring Ashwini Deshpande and Alice Evans. Stay tuned for a summary soon!
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