L14: Developmental Coalitions

Developmental Coalition

a broad coalition with concentrated enforcement power that directs rents to invest in development

• depends on the relationship between political and economic elites

Who is included in developmental coalitions?

• Made up of winners, losers, women, excluded people, business men → everyone needs to be involved for this to work

Developmental coalition: key parts of definition

1. Broad coalitions

2. Concentrated power

3. Rents directed to investment

key parts of definition: broad coalitions

Key economic and political elites are part of the coalition

• So institutions are inclusive, not extractive

• So there's 'Embededness' between the bureaucracy and private sector

• So losers are credibly compensated and don't resist

• So Collective action is able to shift the equilibrium

Key parts of definition: concentrated power

The leader can discipline members of the coalition → someone is on top

• So institutions are enforced

• Accountability limits corruption and clientelism

  • Does not eliminate it → Ensuring corruption/favoritism 'buys' development by protecting investments and compensating the losers

• Autonomy of bureaucrats is protected

key parts of definition: rents directed to investment

• A Developmental State: "Centralizing the management of economic rents"

• 'Embedded' autonomy coordinates and protects investments

Developmental coalitions do not avoid politics

• They make development politically successful:

  • Business elites get investment opportunities and protection if they provide electoral financing

  • Bureaucrats earn professional and social praise from delivering services, not corruption

  • Voters reward politicians for development

Key actors in development

• Business elite

• Voters

• Bureaucrats

Development is grounded in new relationship between key actors

By giving something to each key actor, you get something back that will benefit development

Other types of coalitions on development

• make development politically unattractive →prevent development

  • Narrow coalitions

  • Extractive

  • Benefit from keeping competing groups poor

How do we make developmental coalitions sustain?

Policy feedback

Policy feedback

policies and institutional reforms change future politics

How is policy design used?

• not a question of technical cost-benefit analysis

  • Or measuring 'pro-poor' impact

• But anticipating how policies can raise the political pressure for future development through:

  • Accountability

  • Collective Action

  • Representation

Policy feedback Bolsa Familia example

• Bolsa Família cash transfers in Brazil have created a strong vested interest defending the program

  • Accountability: A programmatic policy giving voters the economic security to reject
    clientelism

  • Collective Action: A new collective identity and pride among poor beneficiaries

  • Representation: Benefits go to mothers, strengthening their political power

• political reward: keep program going, people more likely to vote for current party in power

Developmental coalitions in Rwanda: reason they have been able to develop

1. Broad coalition

• Politicians

• Business, military elites

• Tutsis and Moderate Hutus

• Women

2. Concentrated Power

• The Rwandan Patriotic Front (RPF) is a dominant party

  • President: just won a war (genocide): has proven he has a strong military

• Grounded in the military

3. Directing rents to investment

• Tri-Star Investments / Crystal Ventures (100%
  RPF controlled)

• >3% GDP; 9% of national revenue

• Political protection from the RPF

  • Investing bc its protected by gov (owned by gov)

Developmental coalitions in Rwanda: Development is politically beneficial

• RPF electoral campaigns financed by Tri-star/Crystal profits (50% of the 2010 campaign)

• A 'Developmental Patrimonial' state

1. Developmental: Directing and disciplining resources for investment

2. Patrimonialism: Centralized and personalized power

   • Reflects the agency of Kagame

   • Surprising and risky!

   • What guarantees Kagame won't change his mind?

What conditions permitted the emergence of a developmental coalition in Rwanda?

• structural conditions

  • Weberian bureaucracy

  • Disempowerment of large landowners

  • Dominant, cohesive elite

  • External threat → may explain why President Kagame felt he needed to develop and bring in broad coalitions

• Critical juncture

  • 1994 genocide and RPF’s victory

• Agency of Kagame in forming a coalition

Developmental coalition is Rwanda: agency of Kagame

• Forging a broad coalition

  • Inviting Hutu moderates into the government

  • Convening private sector investors, exiles, diaspora

• Using concentrated power

  • "A steady stream of officials at all levels of government have been criminally or administratively sanctioned" (WB 2020)

  • Human rights violations, arrest of journalists, and assassinations of opponents to retain power

• Enforcing accountability

  • Strict punishments for corruption

  • Fines for parents whose children are not in school

• Initiating collective action

  • Social norms, eg. Imihigo, Ubudehe,
    Umuganda

  • A national civic (non-ethnic) identity

• Increasing representation for pro-development groups

  • 30% quotas for women since 2003

Is the developmental coalition sustainable?

• Dependent on Kagame

  • On a person instead of party (like China CCP)

• Economic crisis may undermine the coalition

• Reciprocal financing can easily become corruption

• Dominant parties lack credibility

• Violence/invasion discourages investment

What does the role of agency and coalitions imply for the role of donors and external aid in Rwanda?

1. Understand the motivations of leaders and the nature of coalitions

• Do political science!

2. If the coalition is not developmental, limit support

• At best, finance civil society instead

• Try to stimulate developmental coalitions

3. If the coalition is developmental, support it with very few conditionalities

• Local actors are already motivated to enforce the rules and accountability

• The risks of aid (corruption, lack of ownership, isomorphic mimicry) are less of a concern

• Eg. Rwanda one of only two countries receiving an 'A' in the OECD 2010 evaluation of the Paris Agenda for
  Action

Summary

• Broad coalitions to ensure elites support development

• Concentrated power for enforcing the rules

• Directing rents to investment

• Using Policy Feedback to sustain progress