The Challenges of Building a Democratic Developmental State
by Tesfaye Habisso, August 23, 2010
"A common factor
among developmental states appears to be a committed leadership that is
embedded in the 'right' context of demands. Developmental states are usually
characterized by a leadership which is strongly committed to developmental
goals, and which places national development ahead of personal enrichment
and/or short-term political gains"
[Ghani et al., 2005; Leftwich,
2000; Rotberg, 2004].
In Ethiopia, since the last seven years or so, the incumbent party and government have explicitly committed themselves to building a democratic developmental state that efficiently guides the national socio-economic and political development of the country by mobilizing the human and material resources of the state and directing them towards the realization of common goals. The current rulers place the needs of the poor and social issues such as health care, housing, infrastructure, education, poverty alleviation and reduction as well as a social safety net at the top of the national agenda. The country is led by a dedicated, radical and committed leadership bestowed with vision and strategy to fundamentally transform the socio-economic face and makeup of the nation in a relatively short period of time. Starting from a very dismal and pitiably low base of economic and human development as of 1991, considerable achievements in a large number of socio-economic and political spheres have already been registered throughout the country. The tireless struggles to improve the living standard and overall well-being of the rural and urban populations across the country, to insure the rule of law and to safeguard human and democratic rights are continuing unabatedly. Although a lot remains to be done when compared to the constitutional democracy that the country and state boast of, today, peace and stability reign throughout the country, attracting many foreign and local investors to start new businesses in Ethiopia. We also observe the current regime relentlessly striving to root out, rent-seeking, predatory behaviour, corruption and other malpractices in the public bureaucracy, to build an ethical, customer-friendly, efficient and meritorious public service, a well-functioning public-private sector alliance and collaboration, creating an investor friendly environment, supporting small business development and peasant agriculture productivity as well as commercialisation of small-scale agriculture, generating massive employment opportunities for the urban youth and women, encouraging export-led growth of the agricultural sector, and using state owned enterprises effectively and driving strategic investment initiatives. As a result, double-digit annual economic growth has been a characteristic pattern of the national economy since the last six or seven years, and now the government has formulated and launched a five-year Growth and Transformation Plan (GTP) with an over-ambitious aim of doubling the present national economy or gross domestic product with an expected yearly economic growth of 11- 14% GDP, including doubling the agricultural production of the country at the end of the five-year period (2011-2015).
The State is
also strongly committed to playing a big role in keeping our economy
competitive and close to the leading edge in the global development of
knowledge and technology by pursuing a democratic developmental state, akin to
the current experiences of similar developmental states such as South Africa,
Botswana, Mauritius, Ghana, Brazil, among others. But what do we mean by a
'democratic developmental state'? How is it possible to simultaneously tackle
the twin challenges of socio-economic transformation: democracy and
development? What is the relationship between democracy and development? Does
democracy promote development or is it the vice versa? These vexing questions
require succinct answers.
Before going any further in the discussion of the topic, I believe, we must start with a definition of the concept because the term 'developmental state', amongst many circles of academics and business elites in Ethiopia today, is almost equated with the mere imposition of 'hard power' and authoritarian rule on the society with the sinister aim of perpetuating one-party rule under the guise of implementing socio-economic and political policies and programs in order to achieve fast and accelerated economic development and to extricate the poor masses from the scourges of poverty and depravation in a short period of time. This is because of the authoritarian political system that was prevalent during the developmental process of the so-called East Asian Tigers or Newly Industrialized Countries (NICs) such as Korea, Taiwan, Singapore, etc. in the 1960s and 1980s applying authoritarian politics to implement their developmental policies and agendas, and achieving spectacular economic growth rates and sustainable development in just three decades or so.
Yes, most developmental states in East Asia were
initially authoritarian and applied heavy-handed approaches to implement their
developmental policies and achieve fast growth in a short period of time. For
these poor societies democracy in the short-term was considered a luxury they
could ill afford, and thus they focused more on developing discipline than
democracy, believing that the exuberance of democracy would lead to
indiscipline and disorderly conduct which would be inimical to development.
However, their integrity and commitment to achieve their developmental
objectives and goals were unprecedented. This does not, however, imply that all
authoritarian regimes are developmental and it also does not mean that states
need to be authoritarian in order to be developmental. There have been many
examples of anti-developmental or non-developmental authoritarian states in
Africa and Latin America; Ethiopia of the pre-1991 era could be cited as an
illustrative example in Africa. On the other hand, Brazil and South
Africa today indicate that democratisation and a greater developmental
orientation of the state can occur in parallel. In the case of Brazil,
democratisation entailed a transition from military authoritarianism to
democratic rule, while in the case of South Africa it was a transition from
Apartheid to inclusive democracy.
However, building developmental states in a democratic context brings about particular challenges, which for the most part Asian success stories did not face. This issue has been neglected in much of the literature on developmental states. Brazil, India and South Africa, for example, have faced significant obstacles in managing their political economy with what Herring (1999) described as 'one arm tied behind [their] back by [their] commitment to liberal democracy'.
The term 'developmental state' does not enjoy any
clear consensus about its meaning. Some even question the appropriateness of
the term 'developmental state' contending that a 'state' as an abstract entity
can neither be developmental nor non-developmental, and it is perhaps a
'regime', they contend, that may deserve such a label. Leaving aside this
contention for further debate and scrutiny in the future, let us examine the
views of other scholars on the issue. According to Castells: "A state is developmental when it establishes as its principle of
legitimacy, its ability to promote and sustain development, understanding by
development the combination of steady high rates of growth and structural
change in the productive system, both domestic and in the relationship to the
international economy... Thus, ultimately for the developmental state, economic
development is not a goal but a means." [NUMSA, October 3, 2006]
Chalmers Johnson contends that: "the
developmental state was one that was determined to influence the direction of
and pace of economic development by directly intervening in the development
process, rather than relying on the uncoordinated influence of market forces to
allocate economic resources."
WIKIPEDIA, the Free Encyclopedia
describes a 'Developmental state', or hard state, as "a term used by
international political economy scholars to refer to the phenomenon of
state-led macroeconomic planning in East Asia in the late twentieth century, In
this model of capitalism (sometimes referred to as state
development capitalism), the state has more independent, or
autonomous, political power, as well as more control over the economy. A
developmental state is characterized by having strong state intervention, as
well as extensive regulation and planning. The other characteristics include (i) emphasis on market share over profit; (ii) economic
nationalism; (iii) protection of fledging domestic industries; (iv) focus on
foreign technology transfer; (v) large government bureaucracy; (vi) alliance
between the state, labour and industry called corporatism; (vii) scepticism of
neo-liberalism and the Washington Consensus; (viii) prioritisation of economic
growth over political reform; (ix) legitimacy and performance; (x) emphasis on
technical education. The term has subsequently been used to describe countries
outside East Asia which satisfy the criteria of a developmental state.
Botswana, for example, has warranted the label since the early 1970s. The developmental
state is sometimes contrasted with a predatory state or weak state.
The
first person to seriously conceptualise the developmental state was Chalmers Johnson. He wrote in his book "MITI and the Japanese Miracle":
In states that were late to industrialize, the state itself led the
industrialization drive, that is, it took on development functions. These two
differing orientations toward private economic activities, the regulatory
orientation and the developmental orientation, produced two different kinds of
business-government relationships. The United States is a good example of a
state in which the regulatory orientation predominates, whereas Japan is a good
example of a state in which the developmental orientation predominates.
Recent writing on developmental states has emphasized the
importance of both infrastructural powers and
political commitment. According to Ghani et al.
(2005), a 'developmental' state project must possess at least two essential
attributes. First, the state must have the capacity to control a vast majority
of its territory and possess a set of core capacities that will enable it to
design and deliver policies; secondly, the project must involve some degree of
reach and inclusion, and have an institutional, long-term perspective that
transcends any specific political figure or leader, and emphasizes commitment.
In his view, an ideal-type developmental state is one that demonstrates a
'determination and ability to stimulate, direct, shape and cooperate with the
domestic private sector and arrange or supervise mutually acceptable deals with
foreign interests' [Leftwich, 2000: 167-8]. Thus, a
developmental state is broadly understood as one that evinces a clear
commitment to a national development agenda, that has solid capacity and reach,
and that seeks to provide growth as well as poverty reduction and the provision
of public services [V. Fritz and A.R. Menocal, 2006:
5-6].
A regulatory state governs the economy mainly
through regulatory agencies that are empowered to enforce a variety of
standards of behaviour to protect the public against market failures of various
sorts, including monopolistic pricing, predation, and other abuses of market
power, and by providing collective goods (such as national defence or public
education) that otherwise would be undersupplied by the market. In contrast, a
developmental state intervenes more directly in the economy through a variety
of means to promote the growth of new industries and to reduce the dislocations
caused by shifts in investment and profits from old to new industries. In other
words, developmental states can pursue industrial policies, while regulatory
states generally cannot.
As in the case of Japan, there is little government
ownership of industry, but the private sector is rightly guided and restricted
by bureaucratic government elites. These bureaucratic government elites are not
elected officials and are thus less subject to influence by either the
corporate-class or working-class through the political process. The argument
from this perspective is that a government ministry can have the freedom to
plan the economy and look to long-term national interests without having their
economic policies disrupted by either corporate-class or working-class
short-term or narrow interests.
Models or Types of State
and Their Role in Economy
Peter Evans of the University of California at
Berkeley and a sociologist by profession categorizes states into three types
(or models) based on their roles in economic development--the Minimal State, the Developmental State, and the Predatory State [7]. Artikel Ilmiah
adds another type: the Regulatory
State [8]. However these types of state are only ideal types.
Given the complexity of reality, countries have historically applied a
combination of them. Other scholars categorize states into four models; these
are: the democratic
interventionist-welfare state, commonplace in many Western societies; the developmental state that evolved in the Soviet
system, and spread with some modifications to many developing countries; the liberal, market-friendly
state espoused by
the World Bank, which has found a footing in most developing countries that
have taken structural adjustment loans from the World Bank and IMF; and the business-like, managerial
state promoted by
Margaret Thatcher, Ronal Reagan and others. These types of states are not
essentially at odds with or much different from the above state models. It is
also contended that innovations in any kind of state can, with suitable
modifications, be adapted in any other kind of state, and that innovations in
governance systems and adaptive borrowings are powerful keys to state
excellence [Khandwalla P.N, "Revitalising the State: Models of the Modern State", 1997].
When we analyse the state models, we come to understand
that the Minimal State is a
concept from Adam Smith. The supporters of this concept argue that market
mechanisms know best and work more efficiently than governments. To have the
most favourable conditions for business, the role of government should be kept
as minimal as possible. Based on this framework, the role of government is
restricted only to preventing monopoly and externalities, providing public
goods, and enforcing the law. Government's help to business should be indirect
and non-selective.
The
Regulatory State goes one step further than the
Minimal State. The supporters of the regulatory state argue that the government
is also responsible for the welfare of society as a whole and may help business
people by ensuring a better government. From this point of view, indirect help
is not and never sufficient. Government should be more active in giving direct
help and should sometimes be selective. Two variants of the regulatory state
are the Associative
State and the Welfare State. The Associative
State frames government to work together with business people and labour to
mobilize productivity and allocate distribution for welfare.
The Welfare
State frames government to distribute welfare programmes (e.g. housing,
unemployment aid, healthcare, etc.) and sometimes, to protect small businesses
from the threat of big business.
The Developmental State goes one step further than the
Regulatory State. The supporters of the Developmental State argue that the
government should direct the trend of national industries and pick the
"winners" to become the leading industries (or business locomotives).
To play this role powerfully, the government should manipulate industrial
policy (protection, subsidies, lower tax), offer cheap loans, and give administrative
guidance that can direct business people to choose certain business strategies.
The assumption of this approach, contrary to the Minimal State, is that the
government knows more than the market how to achieve the highest national
economic growth.
The last one is the Predatory State. The easiest way to describe the
predatory state is as follows: "The predatory state is the developmental
state without bureaucratic competence." As a developmental state, the
predatory state also directs the trend of business and picks the
"winners". However, the criteria for the
intervention is not technical competence based on assessments of
expertise, but nepotism and corruption. The government's high officials act as
rent seekers, giving government facilities and protection to business people,
and getting personal benefits in return.
The indirect role of government refers only to the
Minimal State. In this category, the role of the government is only to protect
market mechanisms and to build infrastructures for the economy. The government
may spend much money to build railroads or highways. This role is considered
indirect, since what is created is a part of public goods. The direct role of
the government refers to the
Regulatory State, the Developmental State and the Predatory State, since in these states the
government's role is to be selective and more than just to protect market
mechanisms.
In the history of business, the governments of the
United States and Great Britain play roles as Minimal States, Regulatory States
and Developmental States interchangeably, from one point of time to another.
Compared to the United States and Great Britain, Japan acts as a developmental
state much more frequently.
The
Relationship Between Model of State, Development and
Democratisation
Although there has been considerable discussion in
the development economics literature on the role of the state, it is only in
recent years that explicit attention has been paid to the model of state and
its relationship to development. As development economics moved from a narrow
definition of development confined largely to the growth of per capita incomes
to a more holistic and needs- and- rights- based approach, the form of the
state became relevant to the discussion.
While neo-classical economics was based on the
implicit assumption of a minimalist state, all late-industrializing countries
chose to deviate from the prescription, giving rise to the concept of a
developmental state which played an active role in promoting the country's
development. However, a developmental state was not preordained to be either
democratic or dictatorial, nor destined to be either socialist or capitalist.
The prototype of non-democratic developmental states with
capitalist orientation were pre-War Japan and East Asian countries and
that with socialist orientation were the former Soviet Union and East European
countries.
Only the First World countries of Europe and North
America had the distinction of combining developmental capacity with a
democratic political regime. The basic characteristic of a developmental state
was to promote the mobilization of economic surplus and its investment into new
industries to ensure self-sustaining growth and rise in per capita incomes.
The developmental state used a large variety of instruments,
both direct and indirect, to promote industrialization: general and targeted
subsidies; tariffs; credit and direct finance; regulation of foreign investment
and foreign capital inflows. Developmental states enlarged the size of the
domestic market by unifying their countries politically and by investments in
infrastructure.
The jury is still out on whether all countries can
or should become a developmental state and whether a developmental state
necessarily should be democratic. Historically, there was no strong positive
correlation between the two.
The paradigm of a developmental state, which is
largely based on the East Asian "miracle" economies
is now facing a less hospitable environment as a result of the financial crisis
faced by these economies during the late 1990s and the increasing pressures to
open up the economies to foreign competition in all spheres.
However, the basic idea of a developmental state
with managerial capacity and leadership could still hold a country in good
stead in facing the challenges of globalization.
With the change in the scope and objectives of
development, the need for defining the form of government to achieve
developmental goals has also become imperative. So long as development was
defined narrowly as growth, it mattered little how it was achieved and often
dictatorial and military regimes (such as in East Asia) performed better than
democratic regimes.
However, with the inclusion of such objectives as
social, political and institutional modernization; and widespread improvement
in the human condition, including reduction of inequality of incomes, poverty
incidence and gender gap, among others, the need for a democratic dispensation
became unavoidable. However, the idea of democracy as a universal commitment is
quite new, as it is quintessentially a product of the twentieth century.
Throughout the nineteenth century, theorists of democracy found it quite
natural to discuss whether one country or another was "fit for
democracy." This thinking changed only in the latter half of the last
century, when it came to be realized that a country does not have to be deemed
fit for democracy, rather it has to become fit through democracy. In fact, both
democracy and development have rather steep and non-linear learning curves,
climbing which is possible only through considerable investment of
perseverance, patience and time [S.M. Naseem,
2004:2].
In his recent work, Development as Freedom,
Professor Amartya Sen has
emphasized the link between democracy and development and has debunked the
oft-repeated claim that undemocratic systems are better at fostering economic
development. Sen finds no
convincing evidence that authoritarian governance and the suppression of
political and civil rights are really beneficial to economic development.
Systematic empirical studies give no real support to the claim that there is a
general conflict between political rights and economic performance. In fact, a
harsher political system is often counterproductive in bringing out the full
potential of the labour force.
What Are Developmental
States and Why Do They Matter?
Again, what do we mean by the developmental state?
And why do we believe that this concept contributes something useful to
contemporary thinking on development policy?
According to Ghani et al.
(2005), a 'developmental' state project must possess at least two essential
attributes. First, the state must have the capacity to control a vast majority
of its territory and possess a set of core capacities that will enable it to
design and deliver policies; secondly, the project must involve some degree of
reach and inclusion, and have an institutional, long-term perspective that
transcends any specific political figure or leader, and emphasizes commitment.
In his view, and ideal-type developmental state is one that demonstrates a
'determination and ability to stimulate, direct, shape and cooperate with the
domestic private sector and arrange or supervise mutually acceptable deals with
foreign interests' [Leftwich, 2000: 167-8]. Thus, a
developmental state is broadly understood as one that evinces a clear
commitment to a national development agenda, that has solid capacity and reach,
and that seeks to provide growth as well as poverty reduction and the provision
of public services.
Drawing on the work of Johnson (1982), Deyo (1987) and Evans (1995) among others, we understand a
developmental state to exist when the state possesses the vision, leadership
and capacity to bring about a positive transformation of society within a condensed period of time. To be judged developmental, a state does not
need to be in control of everything and successful in all spheres. A
transformation that is positive overall may be accompanied by a range of
negative consequences, such as major environmental damage or greater social
tension, which become problems that society and the state have to address in a
subsequent phase.
The transformation can also take various forms. In
the classic East Asian examples, it was aimed at speeding up growth, while at
the same time enhancing opportunities to participate in the modern
economy--most commonly through the expansion of public services such as
education, health care and agricultural extension. The developmental state was
associated with rapid processes of industrialization and/or the adoption of new
technologies--that is, moving into higher value-added activities relative to
the starting point. Typically, there was a shift from subsistence agriculture
to more commercial, export-oriented farming, or to textile processing, or to
tourism, or a mixture of these.
Clearly, not all social transformations are
actively promoted by developmental states. There are many instances of
private-sector-led growth in which the state's role has been quite limited. In
addition, not all attempts at state-led transformations succeed.
In fact, in developing countries,
ambitious attempts at state-led transformation have commonly met with failure,
often with far-reaching negative consequences [Scott, 1998; Lockwood, 2005].
Moreover, the developmental orientation of a state is not a permanent condition
but rather a dynamic feature with a limited time horizon. Germany and Japan,
for example, had developmental states at critical junctures in their history,
which triggered considerable economic and social transformations, while also
storing up unresolved issues for the future [Moore, 1966]. Today the challenges
are different and those countries' states [regimes] would no longer be
considered developmental. Nor need the developmental condition be even across
the entire state: a state may be characterized by the co-existence of sectors
or institutional areas that have a clear developmental orientation with areas
where significant anti-developmental factors are in play.
Developmental states have been the subject of
research and analysis at various points in history. The roots of the idea of a
developmental state reach back at least to List (1909) and Gerschenkron
(1962), whose concern was the role of the state in rapid 'late'
industrialization in continental Europe. The most recent experiences with
successful transformations generated by developmental states have been those in
East Asia between the 1960s and 1980s. Over a period of 30 years, a set of
city-states and countries including Hong Kong, Singapore, South Korea and
Taiwan underwent rapid economic growth and radical socio-economic change,
moving from being poor agrarian societies in the 1960s to producers of high
technology and high value-added goods by the 1990s [Fritz and Rocha Menocal, 2006]. These so-called
'Asian Tigers' have generated a considerable literature [Evans, 1995; World
Bank, 1993; Haggard, 1990; Kohli, 2004]. Since the
1980s, developmental states in China and Vietnam have also overseen a
remarkable process of social transformation. More limited examples of state-led
development can be found in countries such as Brazil, India and Mauritius
[Evans, 1996; Grindle, 1996; Rocha
Menocal, 2004].
As this illustrates, we can with hindsight quite
easily identify developmental states; that is, once the transformative
outcomes have become visible. However, it is less easy to specify ex ante the key characteristics. Developmental states are
marked by a combination of capacities, visions, norms and/or ideologies. They
are not associated with specific policies; at different times and in different
places, very different policies have ushered in social and economic
transformations. At most, as Woo-Cummings (1999: 1-2) explains, the
developmental state is 'neither socialist...nor free-market...but something
different: the plan-rational capitalist developmental state...[which
links] interventionism with rapid economic growth'.
A common factor among developmental states appears
to be a committed leadership that is embedded in the 'right' context of
demands. Developmental states are
usually characterized by a leadership which is strongly committed to
developmental goals, and which places national development ahead of personal
enrichment and/or short-term political gains [Ghani
et al. 2005; Leftwich, 2000; Rotberg,
2004]. Historically, many of the examples of the emergence of such a leadership
have been associated with a severe crisis (the perceived threat that Japan
posed to South Korea, for example), and the response that political elites have
designed to overcome it [Lange and Rueschemeyer,
2005; Herbst, 2000]. On the other hand, a degree of
political stability is usually a precondition for such capacities to be
sustained and to flourish. Aspects of the domestic context are important as
well: demands arising from society, and in particular from wider elite groups,
as well as international factors, may help or hinder the efforts of a national
leadership in pursuing developmental goals [Gordon White, 2006: 535].
Many of the original leaders in post-colonial developing
countries had a developmental vision: Julius Nyerere
of Tanzania and Kwame Nkrumah of Ghana are perhaps
the best known African examples. Patrice Lumumba had
the potential to become a visionary leader in the Congo. However, wider
conditions were disadvantageous. Domestically, there were strong clientelist demands for spoils, and ethnic/tribal rivalries
that needed to be managed. The international context of the Cold War was
particularly unfavourable, providing the backdrop to the elimination of potentially
good leaders (for example, the murder of Lumumba), as
well as the imposition or tolerance of outrageously bad ones.
The importance of the structure of domestic demands
is reflected in a fundamental characteristic of the developmental state: what
Evans (1995) calls its 'embedded autonomy'. According to Evans, the
developmental state is autonomous insofar as it has a rationalised bureaucracy
characterized by meritocracy and long-term career prospects, traits that make
civil servants more professional and detached from powerful rent-seeking
groups. On the other hand, the state cannot be too insulated from society
without running the risk of becoming excessively detached, unable to appreciate
and act upon societal needs. Thus, it must also be embedded in society, that
is, [connected to] a concrete set of social ties that binds the state to
society and provides institutionalised channels for the continual negotiation
and renegotiation of goals and policies' [Evans, 1995:12].
State capacities generally cannot increase if a
developmental commitment among the state elite is missing or insufficiently
resolute. This may be the main reason why so much donor-sponsored capacity
building has proven ineffective. However, commitment at the elite level is
insufficient on its own. It is usually necessary for the elite to expound a
vision that connects the state and society in a mutually binding way, through
some form of shared 'national project'. Another of the underlying requirements
of the developmental state is thus the creation of a nation-wide public [Ghani et al. 2005]. A nation-wide public need not be rooted
in a unified sense of 'nation' based on cultural and linguistic unity, but may
well take the form of a more civic identity (as in the case of the US). The
important issue is that all citizens see themselves as Ethiopians or Nigerians,
Kenyans or Tanzanians as much as or more than as an Oromo or as Igbo or Kikuyu or Nyamwezi. Post-independence leaders in sub-Saharan Africa
often understand this challenge, and their drive to expand primary education
was in good part aimed at creating a national public consciousness [Turner,
1971; Deutsch, 1953; Connor, 1972].
Many African countries experienced some sort of big
push for development during the early independence years. However, subsequently
governance deteriorated too sharply for this to be followed through. The
deterioration was due to a combination of domestic and external factors. On the
one hand, clientelistic and/or neo-patrimonial social
structures strangled the potential of promising economic sectors and undermined
attempts at state-led industrialisation. Efforts to spread education stalled,
inter alia when increasingly authoritarian leaders
found that those with some education, but lacking good employment opportunities
(due to the clientelistic throttling of the economy),
become politically dangerous. National armies discredited themselves through
bloody coups and internal divisions along ethnic lines. The project of national
integration failed.
Embedding
State Autonomy
The big question for political economists in the
1990s was why the East Asian Tigers were growing so dramatically when other
strong states were faring badly. Dictatorships and post-socialist states during
the same period, for example, were creating the kind of economic and social
ruin that caused their populations to detest them.
One answer came from Peter Evans, who identified
two linked factors that distinguished successful 'developmental states' from
economically failing ones, which he called 'embedded autonomy'. 'Embeddedness' he defined as good communication and ties
with the private sector--the factor stressed by those promoting a
'developmental state' in Ethiopia regarding pro-poor inclusion. But this factor
was bound up with 'autonomy', defined as political autonomy or insulation,
which would simultaneously allow state officials to make policy professionally
and independently of special private-sector interests [Peter Evans, 1995: 45].
In Evans' analysis, the interdependency of these
factors was crucial. Social embeddedness without
political autonomy would leave state officials vulnerable to private pressures,
leading to corruption and cronyism. Autonomy without embeddedness
would leave state officials isolated from real events, prone to bad decision-making
and, in the worst scenarios, ruinous miscalculations [ibid].
For embedded autonomy to work, Evans observed, the
state must create a meritocratic bureaucracy of
highly skilled people who can freely combine their close contacts with the
private sector with their independent understanding of the global market to
help steer economic planning in directions good for the national economy as a
whole.
Notably, a meritocratic
bureaucracy has nothing to do with democracy. South Korea, Taiwan and Singapore
were, until recently, repressive dictatorships (as was Brazil). These states
used the peasantry (as long as it lasted) for agriculture to drive growth; they
did not look out for peasant interests or any interests that didn't serve
central state growth. Not until the 1980s were the rising middle classes in
these states able to launch effective struggles for greater political voice,
precisely because the states were so strong.
Hence a tangential debate about developmental
states is that if early authoritarianism enabled the East Asian Tigers to
overcome entrenched private interests, then Ethiopia, for example, is hampered
in this respect because Ethiopia today is a constitutional democracy where
authoritarianism has no place whatsoever.
Money
and Autonomy
While authoritarianism may be a necessary
condition, it is not a sufficient one. Even pro-authoritarian development
analysts admit that other necessary conditions are needed: notably, the
financial power that supported strong states in Asia.
Where did that power come from? The answer
clarifies that the key factor for the Tigers was not authoritarianism but yet
another conspicuously neglected truth about the developmental-state model that
should give its admirers pause: for several decades, the US Administration
pumped billions of dollars straight to the East Asian Tigers' governments in
order to consolidate their compliance and capacity in the Cold War. This
massive external funding greatly strengthened these states in relation to their
private sectors, allowing them to operate with unusual independence and
autocracy. Yet, oddly, this enormous financial and political factor is entirely
overlooked by many who enthuse about the capacity of least developed countries
such as Ethiopia and other states to blossom economically simply by emulating
some South Korean policy regarding the bureaucracy.
This massive external funding greatly strengthened
these states in relation to their private sectors, allowing them to operate
with unusual independence and autocracy.
The same factor explains why authoritarian Latin
American states have been unable to follow the East Asian Tigers' model:
because their states lacked that external funding and even by the late 1970s
were running aground on debt. Instead, extensive direct foreign investment in
Latin America (again mostly from the US) strengthened the private sector in
relation to governments, and effectively made the 'developmental state' model
unworkable on most of the continent. Generally, entrenched oligarchies and
repressive landed elites stifled development in the rest of Latin America
precisely because they were in control of the state.
In other words, these states were socially
'embedded' but profoundly lacked insulation from private elite
interests--indeed, they were composed of those interests and existed entirely
to serve them. In these conditions, which endure today, leftist revolutions and
democratic reforms have had disappointing impact in improving the lot of the
poor.
That this vital finding of the 'developmental state'
literature is not even heard is perilous to the Ethiopian debate. For it boils
down to this: it's no good including more people in the nation's development
project (even poor people who clearly deserve more voice in state planning) if
the state bureaucracy lacks sufficient political insulation, because otherwise
this lauded 'inclusion' will just foster more savoury deals, clientelism and tender abuse.
The challenge for Ethiopia as a democratic
developmental state in the making is the same challenge that faces countries
everywhere: to develop institutions and policy instruments, to win the hearts
and minds of the majority of the population around democratic developmentalism, to secure resources, particularly foreign
savings, to build an efficient, meritocratic and
meritorious public service, and to insulate the state from private political
pressure enough to allow 'inclusion' to be a positive form of 'embeddedness' rather than just another distortion. Only
then can the state play a genuinely positive role in relieving Ethiopia's
endemic poverty and inequality and truly serve the nation as a whole. The
future of Ethiopia surely lies in building a robust democratic developmental
state where democracy and development co-exist as 'kissing cousins', because "bread without democracy is bitter and
democracy without bread is fragile."
"If
a country's problems require radical remedies, you need a radical government.
But how can you have a radical government without radically-minded officials?
Difficult problems are solved by people who desperately want to solve them: not
by people who had been fully prepared until polling day to make those self-same
problems worse, rather than better."
[Sir John Hoskyns, 1982].