Lecture 14 - Development coalitions

Developmental coalitions (2)

A broad coalition w concentrated enforcement power that directs rents to invest in development

• Depends on rel between pol + econ elites

Characteristics of developmental coalitions (3)

• Broad coalitions - the broader the better

• Concentrated power - of one person within the coalition

• Rents directed to investment

Broad coalitions (5)

• Key econ + pol elites are part of coalition

• So institutions are inclusive, not extractive

• So there's 'Embededness' between bureaucracy + pv sector

• So losers are credibly compensated + don't resist

• So Collective action is able to shift equilibrium

Concentrated power (6)

• The leader can discipline members of coalition

• So institutions are enforced

• Accountability limits corruption + clientelism

• Autonomy of bureaucrats is protected

• Not eliminating corruption

• Ensuring corruption/favoritism 'buys' development by protecting investments + compensating loser

Rents directed to investment (2)

• A Developmental State: "Centralizing management of econ rents"

• ‘Embedded' autonomy coordinates + protects investments

Developmental coalitions do not avoid politics (4)

• They make development politically successful:

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

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

  • Voters reward politicians for development

Unlike other coalitions that make development politically unattractive (3)

• Narrow coalitions

• Extractive

• Benefit from keeping competing groups poor

Developmental coalitions need to be politically successfull (4)

• Structural constraints still exist; the critical juncture is only temporary

• How do they change politics?

• How do they escape bad equilibrium?

• Definition: policy feedback

Policy Feedback (6)

• Policies + inst reforms change future politics

• Policy design is not qs of technical cost-benefit analysis - Or measuring 'pro-poor' impact

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

  • Accountability

  • Collective Action

  • Representation

But anticipating how policies can raise pol pressure for future development - E.g. (4)

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

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

  • Collective Action: A new collective id + pride among poor beneficiaries

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

Bolsa Família cash transfers in Brazil created strong vested interest defending program - Impact (3)

• People that received Bolsa Família benefits more likely to vote for party that created policy

• All pol parties now compete to extend program

• 'Inclusion of outsiders’

Developmental Coalitions in Rwanda (2)

• Rwanda faces many structural constraints

• Yet it has succeeded in implementing development where others have failed

Rwanda faces many structural constraints (3)

• Geography: Landlocked, tropical

• History + Culture: Colonialism, slavery + genocide damage trust

• Institutions: Authoritarian pol institutions

Yet it has succeeded in implementing development where others have failed (5)

• Institutional rules have been strengthened

• The state has been centralized + given autonomy

• External aid has been absorbed successfully

• Low corruption, low clientelism

• Limited resistance to change by losers/winner

How have developmental coalitions been successful in Rwanda (3)

• Broad coalition

• Concentrated Power

• Directing rents to investment

Broad Coalition - Rwanda (4)

Politicians

Business, military elites

Tutsis and Moderate Hutus

Women

Concentrated Power - Rwanda (2)

The Rwandan Patriotic Front (RPF) is dominant party

Grounded in the military

Directing rents to investment (3)

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

• >3% GDP; 9% of national revenue

• Pol protection from RP

Development is politically beneficial - Rwanda example

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

Type of state - Rwanda (6)

• A 'Developmental Patrimonial' state

  • Developmental: Directing + disciplining resources for investment

  • Patrimonialism: Centralized + personalized power

    • Reflects agency of Kagame

    • Surprising + risky!

    • What guarantees Kagame won't changehis mind

What conditions permitted the emergence of a developmental coalition in Rwanda

• Structural conditions

• Critical juncture - 1994 genocide + RPF’s victory (not work for Cambodia even if genocide)

• Agency

Structural conditions (4)

• A history of Weberian bureaucracy + indigenous state-building

• Disempowerment of large landowners

• A dom, cohesive elite

• External threats that align elite interests w development - from DRC

Agency (8)

• The agency of Kagame in forming a coalition

  • Forging a broad coalition

    • Inviting Hutu moderates into gov

    • Convening pv sector investors, exiles, diaspora

  • Using concentrated power

    • Steady stream of officials at all levels of gov have been criminally or administratively sanctioned"

    • HR violations, arrest of journalists,+ assassinations of opponents to retain power

  • Increasing representation for pro-development groups → 30% quotas for women since 2003

Agency of Kagame in forming a coalition - critics (6)

• The sustainability of the regime is unclear

  • Dependent on Kagame

  • Econ crisis may undermine 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? (3)

• Understand motivations of leaders + nature of coalitions (Do poli science)

• If coalition is not developmental → limit support

• If coalition is developmental → support it with very few conditionalities

If coalition is not developmental → limit support (2)

• At best, finance civil society instead

• Try stimulate developmental coalition

If coalition is developmental → support it with very few conditionalities (3)

• Local actors are already motivated to enforce rules + accountability

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

• Eg. Rwanda one of only 2 countries receiving an 'A' in the OECD 2010 evaluation of Paris Agenda forAction