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Working paper 42
Bhanu Gupta and Abhiroop Mukhopadhyay
The National Rural Employment Guarantee Scheme (NREGS) in India is one of the largest public employment programmes in the developing world. It was introduced by the central government led by Indian National Congress (INC). While its implementation is, in principle, based on demand for work from households, we investigate how political competition affects intra district allocation of funds under the scheme. Using longitudinal data on funds allocated to blocks and elections held at the block level and addressing the issue of endogeneity by focusing on a subsample of blocks which had close elections, we find that the funds allocated were 22 percent higher in blocks where the INC seat share was less than 39 percent in the previous election. We provide a mechanism by for the effect by showing that the results are only true when the MP of the district, a member of the body that approves the block fund allocation, is from INC.
Research Framing Paper No. 3
Significant natural resource finds in developing countries present opportunities for growth and human development, but also challenges. The nature of the ruling coalition in a country when natural resources are discovered has implications for how and in whose interests the resources are governed. Institutional and political relationships play an important role in determining the quality of growth, as well as mediating the interactions between extraction and inclusion, which shape the contribution of natural resource finds to inclusive development.
This new approach examines the specific relationships of scale, space and time that characterise the natural resource sector. At its core is the interaction between economic development, political settlements and political coalitions. It introduces two elements of dynamism: patterns of economic development ultimately modify class structures in ways that cannot be easily controlled by dominant coalitions; and such change itself contributes to further modification of the forms of economic development occurring.
Research Framing Paper No. 2
Although politics is now widely seen as critical in shaping the quality of service provision in developing countries, this recognition has yet to be integrated within the conceptual frameworks that shape research and action in the field.
A new approach aims to offer insights which open up new terrain for action. It extends the World Bank’s ‘accountability framework’ to include three ‘vertical’ levels, emphasising the ways in which political settlements and governance arrangements influence organisational behaviour. This multi-level framework takes specific public service provision agencies as the unit of analysis, with a focus on performance, exploring the sectoral manifestation of political settlements and drivers of organisational behaviour. This enables comparative analysis across multiple sectors and multiple countries in order to better understand variations in performance.
Research Framing Paper No. 1
A significant gap exists between the political settlements literature and the mainstream feminist literature on women in politics. Until recently, feminist political analysis has not engaged effectively with the insights offered by the new literature on political settlements, particularly regarding the extent to which informal and clientelistic forms of politics closely shape the prospects for women’s empowerment.
Combining these two bodies of literature is therefore significant for generating a deeper understanding of how politics shapes the possibilities for greater inclusion of women and promotion of gender equity in development policies, processes and outcomes in developing country contexts. This approach also has relevance for understanding how other marginalised groups may propose alternative interpretations of inclusive development and how these are negotiated.
Working paper 41
Abdul-Gafaru Abdulai and David Hulme
Through an analysis of Ghana’s HIPC Fund, which was established as part of the Poverty Reduction Strategy Papers (PRSP) process, this paper shows how aid-financed efforts to reduce regional inequality in Ghana have failed. Dominant political elites agreed to policies of regional inequality reduction to access aid funding, but, once approved, such funds were allocated on quite different criteria in ways that marginalised the poorest. Analyses here reinforce the growing recognition that developmental outcomes in most poor countries are not shaped so much by the design of ‘good’ policies per se, but more importantly by the power relationships within which policy-implementing institutions are embedded. Aid donors seem unable to fully grasp this important lesson, and so their capacity to contribute to reducing regional inequality remains limited.
Working Paper 40
Jonathan Said and Khwima Singini
Since independence Malawi has failed to translate initial periods of economic growth (growth acceleration regimes) into sustained long-term growth (growth maintenance). This paper assesses why this has been the case and what feedback loops have existed between growth, the political settlement and institutions. This is done by assessing Malawi’s: (1) deals space – are business-government deals credible and open to many, or not credible and closed? (2) rent space – where do political elites source money for their political objectives? (3) product space – to what extent does Malawi’s product base organically spur economic growth? Malawi’s long-term growth problem is that the rent space for the political elite remains too heavily tied to the ‘powerbroker’ business elite that have a low propensity to invest and support exported-oriented reforms. There is relatively little alignment of political rents to ‘magicians’ (value adders and job creators), rentiers (except mining and cotton) and workhorses (the poor). Developmental interest is increasing, though this comes about in dribs and drabs when politicians want growth, so that support is stop-and-go and lacks the continuity necessary to overcome major structural challenges to structural transformation and growth maintenance. This suggests that the nature of growth going forward will be volatile, with a number of booms and crises in short-term growth. While long-term growth is likely to remain positive, driven by improvements in technology, the financial sector, energy and regional integration, it is unlikely to be strong enough in the next eight years to support the welfare requirements of the burgeoning population so as to allow Malawi to maintain high long-term growth. Altering this route would probably involve the disintegration of Malawi’s deeply embedded patronage and clientelist political settlement through the emergence of a developmental dominant party or the easing of political pressures currently caused by a five-year democratic term in which the largest voter group is rural, subsistence farmers, who are too far removed from the government’s policy-making process.
Working Paper 39
David Craig and Doug Porter
Political settlements and pacts now feature prominently in donor narratives about transitions from conflict and institutional fragility to peace and prosperity. “Successful transitions” are said to occur when pacts between political and economic elites are deepened, made more democratically inclusive and gradually institutionalised through security and service delivery out to the edge of national territory. When mapped to any particular case, however, this narrative simplicity is confounded by the longer durée history, culture, geopolitics, institutional and political dynamics. This paper sets out to sharpen analytic tools and framings around post-conflict pacting, institution building and political settlement. Reflecting on the decade since international intervention in Solomon Islands in response to a period known as “ethnic tension”, it develops perspectives from Mustaq Khan and Dan Slater to frame an analysis based in the pacting amongst core actors (political, economic, international elites), and the institutional impacts of how they are enrolled, the modalities and material capabilities they deploy. The combination of these factors in pacts, coupled with how they strengthen or weaken formal and informal governing arrangements, we argue, certainly shape the emerging settlement. Various pacts, however, work according to different modalities and temporalities, to the extent that lining them up with donor interventions routinely results in unintended consequences, including, crucially, institutional layering.
Working Paper 37
Tim Kelsall and Heng Seiha
Since 1960 many countries have experienced growth accelerations, but few have maintained growth. An adequate theory of growth must explain both how some countries kick-start growth, and how some maintain it over decades. For us, the key is to be found in the relationship between what we call the political settlement and the environment for business. Some political settlements create the possibility of a transition from disorder to order in the deals environment, and this creates a potential for accelerated growth. Of these, a smaller subset manages to maintain order while also permitting an increased openness of the deals environment, so that new firms can enter, innovate, compete, and structurally transform the economy.
Over the past 40 years, Cambodia has had one of the world’s most volatile growth experiences. A prolonged economic collapse between 1970 and 1982 was followed by a gradual but unstable recovery up until 1998, while post-1998 saw another growth acceleration and sustained high growth. While growth collapse can be traced to the failure of Prince Sihanouk’s post-independence political settlement, war and the disastrous Khmer Rouge regime, growth acceleration and maintenance has been based on a political settlement which has created a balance between technocrats and rent-seekers within Hun Sen’s dominant coalition. Technocrats are given just enough latitude to support growth industries, while rent-seekers are given the political backing to generate profits, a proportion of which are funnelled to the masses through ruling party patronage projects.
Through interviews conducted in four economic sectors, we show that there has been a positive feedback loop between support for competitive export industries, state capacity, and structural transformation. However, there has also been a negative feedback loop from over-reliance on high-rent industries, to insufficiently inclusive growth and political instability. The political settlement that has underpinned growth and stability for the past 15 years is facing a severe challenge.
Working Paper 38
Abdul-Gafaru Abdulai and Sam Hickey
Debates over whether democratic or neopatrimonial forms of politics are driving the politics of development in Africa have increasingly given way to more nuanced readings which seek to capture the dynamic interplay of these forms of politics. However, most current analyses fail to identify the specific causal mechanisms through which this politics shapes the actual distribution of resources. A political settlements approach which emphasises the distribution of ‘holding power’ within ruling coalitions and how this shapes institutional functioning can bring greater clarity to these debates. Our analysis shows that patterns of resource allocation within Ghana’s education sector during 1993-2008 were closely shaped by the incentives and norms generated by Ghana’s competitive ‘clientelistic political settlement’, which overrode rhetorical concerns with national unity and inclusive development. This had particularly negative implications for the poorest Northern regions, which have lacked holding power within successive ruling coalitions.