Developmental Coalitions

1. Structure versus Agency

• Institutional rules reward coalition members

  • In 2018, 6 Indian airports were privatizedPrivatization rules changed to allow firms without direct experience of running an airport

  • All won by Gautam Adani's Adani GroupA supporter of PM Modi's since 2003

• Coalition benefits can include corruption

  • Brazil's Mensalão ('big monthly payment')scandal

  • US$12,000 per month to vote for the government in congress

2. Developmental Coalitions

Which coalitions are pro-development?

• Definition: Developmental Coalition= pro dev

  • A broad coalition (many groups) with concentrated enforcement power that directs rents to invest in development

    • winners, losers, minorities, businessmen

  • Depends on the relationship between political and economic elites

  • 1) 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

  • 2) Concentrated power: The leader can discipline members of the coalition

    • So institutions are enforced

    • Accountability limits corruption and clientelism

    • Autonomy of bureaucrats is protected

    • Not eliminating corruption

    • Ensuring corruption/favoritism 'buys' development by protecting investments and compensating the losers

• 3) Rents directed to investment

  • A Developmental State: "Centralizing the management of economic rents" (Booth and Golooba-Mutebi 2012)

    • state that isnt just free markets there is some state coordinating investment in a disciplined organized way

  • 'Embedded' autonomy coordinates and protects investments

    • so they aren’t steeling and being corrupt

2. Developmental Coalitions

• Developmental coalitions do not avoid politics

  • its political

    • They make development politically successful:

    • Business elites get investment opportunities and protection if they provide electoral financing (reciprocal exchange)

      • comes from private business elites

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

    • Voters reward politicians for development

2. Developmental Coalitions

• Unlike other coalitions that make development politically unattractive

  • Narrow coalitions

    • it means you dont want ppl outside coalition to develop so your coaltion becomes dominant

  • Extractive

  • Benefit from keeping competing groups poor

• Developmental coalitions need to be politically successful

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

  • How do they change politics

  • ?How do they escape the bad equilibrium?

  • Definition: PolicyFeedback

    • Policies and institutional reforms change future politics

• Policy design is 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

• ex: we need to look of the policies AFFECT/change POLITICS not cost benefit analysis

  • 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

      • no longer dependent for politicians for cash because they had there own money

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

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

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

  • All political parties now compete to extend the program

  • The 'Inclusion of outsiders' (Arretche 2018

3. Developmental Coalitions in Rwanda

• we can use dev coalitions to analyze different countries

• Rwanda faces many structural constraints:

  • Geography: Landlocked, tropical

  • History and Culture: Legacy of colonialism, slavery and genocide must damage trust

  • Institutions: Authoritarian political institutions

• And yet it has succeeded in implementing development where others have failed:

  • Institutional rules have been strengthened

  • The state has been centralized and given autonomy

  • External aid has been absorbed successfully

  • Low corruption, low clientelism

  • Limited resistance to change by losers/winners

    =

• 1.A developmental coalition

  • 1. Broad coalition

  • Politicians

  • Business,

  • military elites

  • Tutsis and Moderate Hutus

  • Women

• 2. Concentrated Power

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

• 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 RP

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

  • A 'Developmental Patrimonial' state (Booth andGolooba-Mutebi 2012)

• 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 changehis mind?

3. Developmental Coalitions in Rwanda

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

• Structural conditions

  • Weberian bureaucracy

  • disempowerment of large landowners

  • dominant cohesive elite

  • external threats that align elite interests w dev

3. Developmental Coalitions in Rwanda

• What conditions permitted the emergence of a developmental coalition in Rwanda?The critical juncture of the 1994 genocide and the RPF's victor

3. Developmental Coalitions in Rwanda

• What conditions permitted the emergence of a developmental coalition in Rwanda?The agency of Kagame in forming a coalition

  • 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 retainpower

3. Developmental Coalitions in Rwanda

• 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

• But the sustainability of the regime is unclear

  • Dependent on Kagame

  • Economic crisis may undermine the coalition

  • Reciprocal financing can easily become corruption

  • Dominant parties lack credibilityViolence/invasion discourages investment

3. Developmental Coalitions in Rwanda

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

• 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 insteadTry 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 forAction