Working paper 99
This paper examines the institutional and political determinants of the timing of growth episodes. We extend the earlier literature on the determinants of the onset of growth accelerations and decelerations by providing a more generalised approach to understanding growth episode transitions. We differentiate between six types of growth episodes – from growth collapses (where the episode specific growth rate, g, is -2 per year), to negative growth (g between -2 and 0), stagnation (g between 0 and +2), stable growth (g between +2 and +4), moderate growth (g between +4 and +6), and rapid growth (g over +6). Using multinomial logit models, in the context of a panel dataset of 125 countries from 1984 to 2010, we examine the likelihood of switching from one growth episode to another growth episode. We find that though bureaucracy quality has a positive effect while switching from negative growth episodes to positive growth episodes, it does not matter in most of the cases of switching from stable or moderate positive growth episodes to rapid positive growth episodes. Both contract viability and democratisation can explain the switching from negative growth episodes to positive growth episodes. Contract viability and democracy can also explain the movements from lower positive growth episodes to higher positive growth episodes. However, while contract viability is important for moving from stable or moderate positive growth episodes to rapid growth episodes, democracy is not important in explaining such switches. This suggests that while better economic and political institutions matter in taking a country from growth collapses to stable growth, economic institutions matter more than the political institutions for the transition from stable growth to rapid growth.
Working paper 98
An increasing body of knowledge is emerging about the ways in which the co-production of basic services can open up space for inclusive development and enhance state effectiveness in the global South. Limited evidence exists, however, about the particular forms of political relationship and programmes that are most likely to generate pro-poor outcomes and more enabling conditions for inclusive urban development. Through the lens of 12 months’ qualitative research into the Transforming Settlements of the Urban Poor in Uganda (TSUPU) programme, this paper examines what has shaped state vision, commitment and capacity for the co-production of urban poverty reduction in a low-income and neo-patrimonial regime. The discussion concludes that TSUPU (and successor programme partnerships) represents a pocket of effectiveness which has opened up spaces of political opportunity for moving towards more inclusive urban development planning and service delivery approaches. The constraints on this political opportunity being exploited to its full potential are significant and will require substantial regulatory and institutional change, in addition to sustained investment in movement building, to contribute to reducing urban poverty at scale.
Working paper 97
The Basic Services for the Urban Poor (BSUP) sub-Mission of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) sought to address the needs of some of the lowest-income and most vulnerable urban dwellers in Indian cities. The promise was that these residents would receive ‘a garland of 7 entitlements’ – security of tenure, affordable housing, water, sanitation, health, education and social security in low-income settlements in the 63 Mission cities. We researched the outcomes of the BSUP in five Indian cities (Bhopal, Bhubaneswar, Patna, Pune and Visakhapatnam), which were selected because of their diversity. They presented a wide range of socio-economic contexts and economic development and also differed in the nature and extent of civil society involvement in BSUP programming.
The research findings analysed outcomes of the BSUP interventions and addressed the significance of State capacities, commitments and vision for urban development for these outcomes. The analysis then considered the ‘drivers of capacity, commitment and vision’. The vision (or idea) of urban development emerged as a significant indicator of outcomes. In practice, the BSUP became a housing programme. The extent to which informal settlement upgrading was preferred over resettlement and site redevelopment with the construction of medium-rise apartments made a significant difference to the satisfaction of residents. Also important, and particularly exemplified by experiences in Pune, was willingness to work with civil society organisations, incorporating their expertise and skills. However, these were not present in all cities. Residents in Bhopal and Visakhapatnam may face particular affordability challenges due to high levels of debt incurred through participation in the BSUP.
In summary, BSUP experiences and outcomes provide evidence of the significance of vision capacity and commitment. While in part these are determined by levels of economic and institutional development, they are also influenced by government willingness to collaborate with civil society agencies with appropriate experiences and skills.
Working paper 96
While several studies have focused on the effect of natural resources on economic development, less attention has been paid to their effects on other development outcomes. We contribute to this literature by studying the impact of resource rents on fiscal capacity, i.e., the ability of states to raise revenues from broad tax bases. We posit that natural resource rents reduce the incentives to invest in fiscal capacity. However, political institutions that limit the power of the executive, by reducing rulers’ discretion over the use of resource revenues, may mitigate, neutralise or reverse such negative effect. We provide empirical support for this hypothesis using a recently constructed data set on non-resource taxes and panel methods for 98 developing countries covering the period 1981-2011. Moreover, we show that the effect of resource rents is likely to work mainly through institutions that make the tax system accountable and transparent to citizens. Our findings imply that it is possible to develop both fiscal capacity and the natural resources sector, without any trade-off. Whether a fiscal resource curse exists or not is a question of what type of political institutions countries have adopted before they became resource-rich.
Working paper 95
Recent work on the politics of development and, in particular, the role of political settlements in shaping development outcomes has provided important insights into the types of power relations that can contribute to developmental successes and failures. However, important questions remain regarding how political settlements are formed and maintained over time, as well as the extent to which political settlements determine particular policy choices in particular policy domains. This paper considers the role that ideas can play in studying the politics of development and the extent to which an analytical focus on ideas might address some of these gaps. Work on political settlements has, for the most part, emphasised explanations based on material interests, paying little to no attention to the causal role of ideas. This paper first examines the compatibility between Khan’s political settlements framework and theoretical work on ideas, arguing that taking ideas seriously requires questioning some of the core ontological assumptions underpinning the political settlements framework. The paper then proposes an adapted framework that seeks to respond to this challenge and, drawing on three of ESID’s comparative projects, highlights how a focus on ideas can deepen our understanding of the dynamics within particular political settlements and policy domains.
Working paper 94
This paper explores the ways in which power and politics shape the realisation of women’s rights and gender equity in Rwanda. In the past decade, Rwanda has become a global leader in increasing women’s inclusion in politics and in promoting and securing women’s rights. This paper considers legislative reform, policy formulation and policy implementation in two areas: gender-based violence and gender parity in education. The paper injects a gender analysis into the political settlement theoretical framework and seeks to answer two questions: (1) how do women and other actors (including formal and information institutions, powerbrokers and other key decision-makers) negotiate within Rwanda’s dominant-party form of political settlement? And (2) how does Rwanda’s political settlement shape gender equity policy outcomes?
This study found that Rwanda’s success in terms of women’s rights is the result of its vibrant women’s movement, the political will of the dominant party, the expertise of professional technocrats in the government administration, and a system of performance contracts, which shapes bureaucratic behaviour through to the frontline of service delivery. These findings are significant because they highlight the importance of a highly qualified, professional cadre in government and of accountability within government administration for securing women’s rights.
This briefing explores why some states in Africa seem to be stuck in a spiral of corruption and institutional weakness, while others build effective bureaucracies that are able and willing to tackle the challenges of development. Drawing on research from ESID’s PSR project, it compares the public sector reforms of Ghana, Uganda and Rwanda during the period 2000-15. The three countries exhibit different kinds of political settlement, which makes for a useful comparison of how national-level politics filters the diffusion of transnational norms. This helps to build a more nuanced understanding of the varieties of state-building in Africa, and provides some policy implications for reformers.
Working paper 93
While poverty reduction remains central in the Post-2015 Agenda, its determinants remain debated in the literature, especially the role of structural conditions related to governance. This paper provides an assessment of two key dimensions: the global adoption of MDGs and state capacity. We do so by studying whether they facilitated convergence in income poverty measures, using cross-section and panel methods, with data on 89 developing economies for the period 1990-2013. We find that poverty headcount and gap measures tended to decrease faster in countries with initially higher income poverty. Such convergence accelerated after 2000, suggesting that MDGs adoption was instrumental to poverty reduction. However, this still leaves unexplained substantial variation in poverty reduction performance across countries. Such variation is explained by state capacity: countries with greater ability to administer their territories in 1990 experienced faster income poverty reduction and were more likely to have achieved the MDG target. This result is insensitive to robust regression methods and to a large set of controls (initial level of income, dependence on natural resources, education and health inputs, dependence on foreign aid, ethnic fractionalisation, regional effects and a set of governance variables). As good governance and effective institutions are included in the Sustainable Development Goals, this result provides empirical justification for this move, suggesting that more effective states could be crucial to sustain the development progress achieved so far.
Working paper 92
An increasingly large literature on the empirics of economic growth has viewed it as an ‘episodic phenomenon’. In this paper, we re-evaluate the relationship between growth and economic institutions using an episodic framework, where the relevant units of empirical analysis are growth episodes. We use episodes identified in Kar et. al. (2013b) and quantify their success using a novel ‘measure’ termed as ‘episode magnitude’, adopted from Pritchett et al. (2016). In order to capture the multi-functionality of economic institutions, we use separate measures for property rights institutions, contractual institutions and state capacity. Using instrumental variable methods, we show that, together with human capital and level of development, higher institutional quality is also a significant factor that determines more successful growth episodes.