Social Democracy in the Global Periphery: Origins, Challenges and Prospects (book by Richard Sandbrook et al, 2007) – An Ethiopian Comparison and a Commentary

By

Getachew Mequanent

Although the wind of change of the 1980s and 1990s in the global periphery ended many totalitarian rules, it has miserably failed to deliver the promises of democracy and economic well-being (reference to “wind of change” includes market and political liberalization and state decentralization initiatives that were put in place in many developing countries). Three explanations are often provided for this outcome (failure). The first explanation is that reform measures were not deep enough to rectify problems (state and market inefficiencies, for example). Second, reform measures resulted in the dismantling of states so that they became incapacitated to implement policies. Finally, governance issues – they include electoral reforms, political party strengthening/development, judicial reforms, curbing corruption, grassroots participation, etc. – were not addressed.

Amid all this were states that performed well. The book by Richard Sandbrook, Marc Edelman, Patrick Heller and Judith Teichman, entitled Social Democracy in the Global Periphery: Origins, Challenges and Prospects (2007), presents a study of four such states: Chile, Costa Rica, Mauritius and Kerala (which is a regional state in India). These states practiced democracy and achieved economic growth with equity amid what the authors call “inhospitable conditions” of existence including pressures by the World Bank and International Monetary Fund to reduce public expenditures and roll out state intervention in the economy. Today, the authors say, “Mauritius is often described as ‘miracle’, Kerala as a ‘model’, Costa Rica as the ‘Switzerland of Central America’ and Chile as the ‘tiger’ (p. 177)”. Let us bear in mind the differences among these countries/states in terms of historical developments. For example, Chile saw, in the 1970s, the assassination of its popular leader Salvadore Allende by the military and subsequent military rule until the restoration of democracy in the 1990s. Kerala is a state within a nation-state (India) and this imposes restrictions of autonomy in certain areas of policy-making. Chile is more industrialized while Costa Rica and Kerala are mostly agricultural. Kerala and Mauritius have diverse populations, while the Costa Rican and Chilean societies are homogeneous. Costa Rica and the Island of Mauritius are small countries with populations of 4 million and 1.2 million, respectively, while Kerala’s population is 32 millions and that of Chile’s 15 million. The authors devote a whole chapter (Chapter two, entitled burdens of history) to identify and analyze the unique features of each country.

My interest here is to identify broad themes that are more common among the four states studied in this book and compare them with the Ethiopian experience. The good thing about writing a commentary is that not only you can be free to mix intellectual dialogue with politics, but you can also excuse yourself for not doing enough background work in the review of good scholarly work like this one. On the contrary, I do not target an audience of academics or analysts. I am interested in sharing my views and perspectives, hopefully, with Ethiopian decision-makers, students and those ordinary people in the Ethiopian Diaspora who are intoxicated by our politics. It is not also useful to provide information more than what is needed to convey a message. And my main message here, as a known optimist, is that efforts in state building and democratization in Ethiopia are showing promising results and that all actors in society should do more to nurture the gains.

I will be referring to Prime Minister Meles Zenawi’s paper that I reviewed previously (http://www.ethiopiafirst.com/news2006/Mar/Developmental-State.html

and http://www.aigaforum.com/Review_of_Meles_Zenawi_s_Paper.html). I continue to get interested in Meles’ work not only because it is relevant for our discussion here, but also because he spins things around to make policies that affect the lives of our relatives. I also appreciate his passion in pursuit of intellectual work.

I am not familiar with the works of Marc Edelman and Patrick Heller. I have read Richard Sandbrook’s extensive work on Africa. Judith Teichman had taught me a course in Third World politics. Perhaps their book is timely in light of the upswing of leftist politics – more so in Latin America - as a negative reaction to neo-liberal economic reforms and so at a time when many are searching for alternative models of development. As the title indicates, the major theme of their book is social democracy, which they define it as “a democratically controlled and proactive state that pursues equitable and broad-based development within a largely market economy (p. 234)”. They argue that successful state interventions, supported by effective political agencies (read = progressive political elites) in Costa Rica, Chile, Mauritius and Kerala have succeed in the provisions of universal basic education, elimination of illiteracy, improving health and nutrition and supporting other social protection programs. The developmental states taxed the economy to generate revenues; invested the money in human capital and infrastructure development; implemented social and labour reform measures (to ensure equal access to resources); and encouraged and supported organized political participation by subordinated classes. And, well-educated and healthy populations helped these countries/states to be competitive economically. Although national and international investors might have turned away from Kerala (preferring instead other Indian states where taxes are lower and labour laws less serious), Chile, Costa Rica and Mauritius were able to attract global capital through “selective liberalization”, which means 1) identifying comparative advantages, 2) opening up selected sectors for foreign competition, and 3) protecting the remaining sectors. Moreover, these countries created attractive conditions for foreign investment, such as: 1) cheap labour, 2) a skilled and productive labour force, 3) peace and stability and 4) good infrastructure, all the results of democracy and strategic investment in human capital and infrastructure development. The authors then argue that “much can be achieved by middle-income and low-middle income countries despite global capitalism” and that “regulated markets and developmental state can enhance, rather than impair, market functioning – when viewed from the perspective of societal well-being (p. 233.)”.

The conditions for social democracy are engrained in capitalism. If there is no capitalism, there is no social democracy, because “a stunted or undynamic capitalism, such as has prevailed in most countries of the global periphery, inhibits the emergence of social democracy in three ways. It restricts the material resources available for distribution, leads to weak subordinate class formation, and is associated with weak states (178)”.

Then, is social democracy attainable in countries like Ethiopia? Yes. According to the authors, a country does not have to await the transformation of its economy to capitalism, because state action in itself can be sufficient to create the conditions of social democracy through such measures as reforms, social regulation of market forces and social and capital investment. In this respect, the Ethiopian state has as a priority social and capital investment, decentralization, rural development, market regulation and certain institutional and social reform measures. However, what Ethiopia has achieved in less than two decades (counting from the time that EPRDF seized power) cannot be compared with the achievements that took Costa Rica, Chile, Mauritius and Kerala many decades to accomplish. There is no doubt that Ethiopia would have been a high middle-income country today had the development process started in the 1950s and 1960s, when the international climate was less hostile, per capital income was higher and population low. EPRDF inherited a shuttered economy and a weak state riddled with corruption and decaying institutions. Added to this are other structural constrains such as EPRDF’s own organizational weakness (the practice of closed-door decision-making, for example); macroeconomic conditions including drought, low production yields in agriculture and uncompetitive private sector; and external factors such as the war with Eritrea. However, in recent years, we have seen the expansion of schools, health facilities and institutions of higher learning; construction of networks of roads and communication; and improved productivity of the food and export production sectors, all examples of positive and encouraging trends. Equally positive is the effort to strengthen local and regional governance capacities. The World Bank’s decision to implement its Protection of Basic Services program through Woredas clearly shows the growing confidence in local capacity of Ethiopian society, which is essential to democratize the Ethiopian state and polity. However, the Woredas still remain faced with bottlenecks in their functions such as lack of sufficient resources to plan economic and social development (since nearly all of the block-grants go to finance salaries and other operation expenses) and capacity constraints which hinder participatory decision-making and planning.

We have already mentioned that capitalism must create the conditions necessary for social democracy. When there are no factories, industrial centres or commercial farms, there are no workers. When there is no organization of workers, there is no political force to organize society. How about the peasants or what would happen in agrarian countries such as Ethiopia where rural peasants represent the majority of the population? Historically, theories of change had less emphasized the contribution of peasants until perhaps Mao Zedong popularized the peasant society as a backbone of agrarian revolution. Mao’s theory –and it worked very well for him - was that agrarian revolution would succeed because, once peasants are mobilized and transformed, it was easier to control the rural economy and weaken the state (by denying it tax revenues) and then wage a war to overthrow it. His theory had been used by many guerrilla organizations including probably EPRDF. Nevertheless, I do not think that the authors of this book have intentionally overlooked the potential of peasants as participants in the political development process. They are simply theorizing on the basis of the findings of their studies of Chile, Costa Rica, Mauritius and Kerala. All of these countries/states have commercial farms and industries that have produced working class populations. They also have long histories of mass political mobilizations by the help of unions and civic associations. Well-organized societies at the bottom and competitive politics at the top would ensure the representation of different interests in national politics and in decision-making processes. This would then foster compromise among workers and employers, landowners and labourers, and among other classes. Class compromise would, in turn, override class and communal (ethnic) interests, or that equitable political representation and distribution of resources would render any class or communal competition unnecessary. These points can be further explained by the following long quotation (p. 236):

At critical juncture – usually involving a political and economic crisis – decisions are made as to coalitional partners and the distribution of the social product that amounts to a social democratic class compromise. The leverage of the subordinate, organized groups persuades the dominant class to accept a compromise involving democracy and the sharing of the economic surplus. However, such social compacts are possible only when a delicate balance has been achieved. On the other hand, radical popular movements are either defeated or moderate their demands by abandoning revolutionary goals (notably, the expropriation of property), and on the other hand, dominant groups are constrained by either structural factors (the absence of sympathetic armed forces, for example) or their own political weakness from resorting to repression. Social democracy requires a disciplined respect for private property and strict limits to reform on the part of the left forces, or capital will not cooperate. Equally, it requires respect on the part of capital for the principle of social democracy, namely the political allocation of part of the economic surplus.

Again, all this must be seen in the context of the studies of Chile, Costa Rica, Mauritius or Kerala. What is important to us is an understanding that social democracy is about class compromise or about the equitable negotiation of interests among different classes. Nonetheless, Ethiopia cannot be compared with Chile, Costa Rica, Mauritius or Kerala where unions and civil society facilitate organized participation by workers from bottom-up. Ethiopia has 85% of its population living in rural areas. Historically, Ethiopian industrial workers were better off than their rural peasant counterparts – therefore they had no economic and political grievances - and that they were also insignificant iin numbers to constitute a political force. Civil society – a space for self-organization of popular politics - is a recent phenomenon and still developing. Rather, the important factor in Ethiopian society is geography or the rural-urban divide. The rural society consists of impoverished subsistence farmers and the urban society dominated by a powerful social strata consisting of bureaucrats, professionals, intellectuals, traders and ruling elites. Previous Ethiopian states centralized resources and enabled this urban strata to reproduce itself to the extent of taking control of the Ethiopian state and economy. Meles Zenawi’s paper argues that a coalition party could bring together the peasant masses, organized labour and the urban middle class, and if this works out, a coalition party platform would enable different social groups or classes to negotiate their interests. In reality, politics in Ethiopia is articulated around ethnicity, not class. The ruling party, EPRDF, is a coalition of parties that bring together ethnic political elites all over Ethiopia. These national elites have been good at negotiating ethnic interests – which are equitable political representation, autonomy, identity recognition and distribution of resource (excuse us folks, previously unknown ethnic regions now have their own training institutes and universities – an example of equitable resource distribution). One can agree or disagree with the ethnicization of the Ethiopian polity, but certainly EPRDF has managed to achieve “ethnic comprise”. Is this the same as class compromise? Addressing this question may require me to enter into another area of analysis (class vs ethnicity in distributional and political context, for example), which is beyond the scope of this piece.

A bottom-up organizational process is one particular aspect of social democracy. Although peasants dominate Ethiopian Woreda and Kebele Councils, lack of strong institutions including civil society has made it difficult to articulate local interests and channel them upwards to policy arenas. Literacy requirement also excludes peasants from the Woreda Executive Committee (unless this has changed now). More must be done to address such issues.

Meles Zenaw’s paper also argues that the neo-liberal model of development has not worked well in Africa and that African developmental states must guide market forces to balance growth with equity. The authors of this book define a developmental state or what they call “social-democratic regime”, in footnote 22 on page 25 as “a widely supported set of norms, institutions and rules constraining governments to (a) be subject to democratic control, and (b) actively regulate market forces and otherwise intervene to enhance equity, social protection, and social cohesion, in addition to productivity. A social-democratic regime may continue, therefore, despite an election that brings a conservative party or coalition to government”. Democracy and developmental state “reinforce each other in a virtuous circle. Not only can democratic politics motivate state elites to act developmentally, but elite success in achieving growth with equity will further consolidate democratic institutions (pp. 23-24)”.

I have argued that the Ethiopian state is indeed a developing developmental state. However, I have a difficulty of accepting Meles’ notion that ruling elites prolong their rule in order to achieve stability and continuity in political and policy leadership. While they mentioned the experiences of social democracies around the world – such as those in the Scandinavian countries – the authors of this book do not suggest the prolongation of one party rule.

I can hear Meles’ argument – we are talking about intellectual argument here – if it implies that specific situations allow a party to stay on power for long. I am referring to the current situation in Ethiopia where there are no strong opposition parties that can replace EPRDF and build their work on the gains made in recent years. Opposition elites should seriously consider strengthening their parties by mobilizing support from the bottom-up. All the fuss about the international system – lobbying the White House, European Union, aid agencies, human rights groups, etc. – didn’t achieve anything except that it painted a negative image on Ethiopia. The future winners in Ethiopian competitive politics are not those political elites who rely on their knowledge and experience of the international system to mobilize support. The winners will be those who have the capacity to connect with/and mobilize grassroots political forces.

The understanding of a developmental state above conveys a clear message that its norms, institutions and rules must be widely supported so that the state is assured of continuity when another party comes to power. It is therefore important to seriously consider a consensus-driven strategy for state building and democratization in Ethiopia. If the Ethiopian state continues to be regarded as an EPRDF state, there is a danger that an opposition party, should it seize power, will not build on what EPRDF leaves behind to ensure continuity. EPRDF must do more to open the door for inter-party dialogue on issue of national importance. UEDP-Medhin has broken a new ground in Ethiopian politics by announcing that it would engage constructively with EPRDF to help form a consensus during key decision-making processes. Other opposition parties should consider such an innovative thinking in their strategies.

The authors of this book also tell us that electoral politics “motivate state elites to act developmentally”. Is the same true for Ethiopian ruling elites? I will let you ponder on this issue. My own observation is that, in the post-2005 election period, the aging revolutionary democrats have intensified development efforts including talking to Ethiopians to hear their grievances. The other initiative is more self-serving: building their party by recruiting and training members. We would have liked to see more intensified efforts to strengthen parliamentary democracy such as inter-party dialogue to develop a culture of achieving a consensus on public policy issue. Building a strong foundation for Ethiopian democracy also requires support for opposition parties to enhance their organizational capacity. What is the use of having opposition parties in the parliament if they are not provided with sufficient resources to perform their parliamentary functions?

To conclude, developing countries can do well in the global economy if they have developmental states supported by effective political agencies. The authors of the book reviewed here say “globalization and social democracy in the periphery may be more compatible than is commonly thought (p. 253)”. Globalization cannot be avoided, but its negative effects can be dealt with by developing innovative and adaptive strategies of integration into the global economy. I also hope that, in the coming years, Ethiopia will be the subject of studies on the experience of social democracy in the global periphery.

Getachew Mequanent

Ottawa, Canada

July 2007