Continuing from the earlier post here on the stages of development of countries and the emergence of liberal democratic systems.
In Political Order and Political Decay, Francis Fukuyama writes about precocious democracy,
Those countries in which democracy preceded modern state building have had much greater problems achieving high-quality governance than those that inherited modern states from absolutist times. State building after the advent of democracy is possible, but it often requires mobilization of new social actors and strong political leadership to bring about... Many of the problems of developing countries are by-products of the fact that they have weak and ineffective states.
On the importance of strong governments and institutions in preventing conflict and poverty,
Almost all the authors systematically studying the phenomenon of conflict point to weak governments and poor institutions as a fundamental cause of both conflict and poverty. Many failing or fragile states are thus caught in a low-level trap whereby poor institutions fail to control violence, which produces poverty, which further weakens the ability of the government to govern... While many people believe that ethnicity is a cause of conflict when observing the Balkans, South Asia, Africa, and other places in the aftermath of the cold war, William Easterly shows that when one controls for the strength of institutions, any link between ethnic diversity and conflict disappears... James Fearon and David Laitin similarly show that higher levels of ethnic or religious diversity were not more likely to cause conflict when controlling for level of per capita income.
This is a good summary of the need for strong governments,
The first and most important institution that fragile or failing states lack is an administratively capable government... Political order is not just about constraining abusive governments. It is more often about getting governments to actually do the things expected of them, like providing citizen security, protecting property rights, making available education and public health services, and building the infrastructure that is necessary for private economic activity to occur... The real question facing most governments, then, is less whether to redistribute than at what level to do so, and how to redistribute in ways that minimize moral hazard.
This about patronage and clientelism,
A patronage relationship is a reciprocal exchange of favors between two individuals of different status and power, usually involving favors given by the patron to the client in exchange for the client’s loyalty and political support... Patronage is sometimes distinguished from clientelism by scale; patronage relationships are typically face-to-face ones between patrons and clients and exist in all regimes whether authoritarian or democratic, whereas clientelism involves larger-scale exchanges of favors between patrons and clients, often requiring a hierarchy of relationships... In a clientelistic system, politicians provide individualized benefits only to political supporters in exchange for their votes... These benefits can include jobs in the public sector, cash payments, political favors, or even public goods like schools and clinics that are selectively given only to political supporters... In societies where incomes and educational levels are low, it is often far easier to get supporters to the polls based on a promise of an individual benefit rather than a broad programmatic agenda...
Reciprocal altruism involves the exchange of favors between unrelated individuals on a face-to-face basis... Clientelism is a form of reciprocal altruism that is typically found in democratic political systems where leaders must contest elections to come to power... Compared to an elite patronage network, clientelistic networks need to be much larger because they are frequently used to get hundreds of thousands of voters to the polls. As a result, these networks dispense favors not based on a direct face-to-face relationship between the patron and his or her clients but rather through a series of intermediaries who are enlisted to recruit followers. It is these campaign workers—the ward heelers and precinct captains in traditional American municipal politics—who develop personal relationships with individual clients on behalf of the political boss...Clientelism should be broadly related to the level of economic development. This is a simple matter of economics: poor voters can be more easily bought than rich ones, with relatively small individual benefits like a cash gift or a promise... As countries become wealthier, the benefits politicians need to offer to bribe voters increase, and the cost of clientelism rises dramatically.
Italy and Greece are examples of clientelism in Europe. They did not develop modern bureaucracies and modern states before they became electoral democracies. In contrast, in Germany, the militaristic Prussian absolutist monarchy from the 18th century built up a strong state and rule of law (albeit weaker than that achieved in Britain due to the Glorious Revolution and its focus of accountability - no taxation without representation), underpinned by a powerful, autonomous, and merit-based bureaucracy. Since democracy made its appearance only in the 20th century, its governments never needed clientelism to maintain power. Britain, France, and Germany began industrialisation hereby having an organised working class well before they democratised. Political parties emerged only just before democratisation in all these societies.
On British bureaucracy,
British were able to do in the period from the issuance of the Northcote-Trevelyan reforms in 1854 to the establishment of a modern civil service in the 1870s... Northcote-Trevelyan reforms were driven by the demands of the British middle class for access to a civil service dominated by aristocratic patronage.
The last sentence has strong echoes with the Indian Civil Service, especially the IAS in the post-independence era.
This is a good summary of the differing trajectories of various European countries,
As Europe exited feudalism, the key to the eventual emergence of accountable institutions was the balance that existed between the monarch (or state) and the other elite power holders in the society. Where the monarch succeeded in co-opting the aristocracy and upper bourgeoisie, as in France and Spain, weak absolutism emerged; where the monarch and aristocracy joined hands against the peasantry, as in Prussia and Russia, there was strong absolutism; where the aristocracy was stronger than the monarchy, as in Hungary and Poland, there was local tyranny and national weakness... Only in England were the state and aristocratic elites relatively balanced; constitutional government arose out of the fact that neither one could prevail over the other. The English state often threw its weight into the balance in favor of nonelites against the aristocracy, not out of egalitarian ideology but because it wanted to clip the wings of a rival for power. While we are familiar with the story of King John’s barons limiting his power through the Magna Carta, English kings were also instrumental in limiting the power of the barons and lords against their tenants and nonelite.
This about how trust lowers transaction costs,
Living in a high-trust society has many advantages. Cooperation is possible in low-trust societies, but only through formal mechanisms. Business transactions require thick contracts, litigation, police, and legal enforcement because not all people can be relied upon to meet their commitments. If I live in a neighborhood with high rates of crime, I may have to walk around armed, or not go out at night, or put expensive locks and alarms on my door to supplement the private security guards I have to hire. In many poor countries, as we will see in Part II, families have to leave a member at home all day to prevent their neighbors from stealing from their garden or dispossessing them of their house altogether. All of these constitute what economists call transaction costs, which can be saved if one lives in a high-trust society. Moreover, many low-trust societies never realize the benefits of cooperation at all: businesses don’t form, neighbors don’t help one another, and the like...
The vast majority of law-abiding behavior is based rather on the fact that people see other people around them obeying the law and act in conformity to the perceived norm... Conversely, if a bureaucrat sees a fellow worker taking a bribe for allowing someone to jump the queue, or if a politician perceives that the rival party is benefiting from rake-offs from public contracts to his detriment, then he will be much more likely to behave in a similar fashion. If many citizens cheat on their taxes (as happens routinely in both Greece and Italy), then any given person is going to look stupid paying up in full... A low-trust society constitutes what economists call a collective action problem. Distrust is socially counterproductive, and everyone would be better off if they behaved in a trustworthy manner. But any given individual has no incentive to be the first person not to take a bribe or to pay her taxes. Since distrust feeds on itself, everyone is trapped in what is known as a low-level equilibrium, where everyone is worse off but no one can break out. By contrast, if the government were clean, honest, and competent, then people would be willing to trust it and follow its lead.
The United States did not have any legacy of feudalism (and therefore inequality and attendant demands for redistribution) or violent wars, which meant that the imperative for strong state was not felt. This was also amplified by the settlers antipathy to strong government as represented by the absolutism of the British monarchy which made them flee. The settlers brought with them the Tudor tradition of divided sovereignty (as against concentration in one strong government), Common Law as source of authority with attendant role for Courts in governance, and accountable government based on the principle of no taxation without representation. In fact the founding fathers were even suspicious of political parties, with James Madison calling them "factions". Instead their vision was of leadership by public spirited individuals who were concerned about the common good.
America's founding fathers, who drafted the constitution, were elites who graduated from Harvard and Yale. This was also borne out by them recruiting more of their own kind into the leadership positions of the initial governments. The initial electorate were those with property ownership (from the Whig view that only those who paid taxes should have a share in the government). It required the arrival of commoner Andrew Jackson as President to reduce the elitism in US and usher in the Jacksonian tradition of populism which lives to this day.
This description of US system is instructive,
The political system that emerged after the Jacksonian revolution became what political scientist Stephen Skowronek has labeled a “state of courts and parties.” That is, the two institutions of constraint, the rule of law and accountability, were the most highly developed. What did not exist in nineteenth-century America was a centralized, bureaucratic, and autonomous state of the sort that had been created in Prussia, France, and Britain... The emerging political parties substituted for the state by exercising a high degree of control over the operations of the government... Parties organized governmental institutions internally … routinized administrative procedures with patronage recruitment, spoils rotation, and external controls over the widely scattered post offices, land offices, and customs houses.”...The legislative and judicial branches began to take on functions normally performed by the executive in European political systems... for the first two-thirds of the nineteenth century, there was little that the national government needed to do beyond running customshouses and post offices, and distributing land...
American clientelism was most highly developed on a municipal level and survived there for the longest time. Political machines were erected in virtually all the major eastern, midwestern, and southern cities, where they served as mechanisms for mobilizing large numbers of nonelite voters.42 They were particularly important in New York, Chicago, Boston, Philadelphia, and other cities that saw, toward the end of the century, a huge influx of emigrants from Eastern and Southern Europe who had never before voted... It differed very much from the type of patron-client relationships that existed in southern Italy in the nineteenth century, where existing elites could use their wealth and social status to organize and dominate large numbers of poor voters. In America, by contrast, clientelism was a way for ambitious but nonelite politicians to become wealthy and increase their social status, while delivering concrete benefits to their supporters... Municipal-level political machines were simply modernized and highly organized versions of the Melanesian Big Man and tribal wantok, in which an elected leader develops a base of political support by giving out individualized benefits to his supporters.... successful bosses tried to maintain personal relationships with as many supporters as possible, but they needed to recruit precinct captains and ward heelers as intermediaries to manage recruitment of voters, distribution of resources, and monitoring of voter behavior. It was these individuals who had to have detailed knowledge of their constituents and be able to cater to their needs. The individualized benefits given out could vary from jobs in the post office or city hall to Thanksgiving turkeys to hods of coal... Despite these outrageous instances of corruption, municipal machines like Tammany Hall did play an important positive role in mobilizing otherwise marginalized citizens and allowing them to participate in the political system. This was particularly true of recent immigrants, who were often disdained by existing elites for their religion, habits, or sheer foreignness...While the poor gained advantages from the party machine, their long-term interests suffered. Because they were being organized on the basis of the distribution of individual benefits rather than broad programmatic agendas, it was much harder to recruit them into working-class or Socialist parties of the sort that emerged in Britain and Germany, where working-class parties demanded more formal types of redistribution such as universal health care or occupational safety programs.
... parallel reform process unfolded in each American city dominated by a boss and a political machine. For example, the Republican machine in Chicago at the end of the nineteenth century was run by William Lorimer, a congressman and later senator who handed out food, coal, pensions, scholarships, licenses, and jobs to political supporters... His machine, like those in other cities, catered to the interests of the huge number of immigrants and working-class voters who were flocking into the city to work in its new industries.
On the Gilded Age in the US,
Gilded Age that began with the presidency of Ulysses S. Grant in 1869, a period characterized by a number of scandals—the Crédit Mobilier affair, the Whiskey Ring, War Secretary Belknap’s selling of Indian post traderships, the “Salary Grab” in which Congress voted itself a retroactive pay raise at the end of the session from $5,000 to $7,000 per year... With the growth of industrialization and the vast new concentrations of money that came with it, lobbyists emerged to mediate between private interests and Congress. The railroads in particular paid legislators on both federal and state levels to do their bidding. Several western states were commonly believed to be wholly owned by railroad interests...America in the 1880s had many similarities to contemporary developing countries. It had democratic institutions and competitive elections, but votes were bought with the currency of public office. The quality of government was generally poor, a problem mitigated only by the fact that it wasn’t expected to do much in terms of fighting wars or regulating the economy. These conditions changed dramatically as the country began to industrialize in the last decades of the nineteenth century; the United States needed a European-style state, and it slowly began to build one.
On the end of clientelism in the US,
The end of the patronage system at a federal level did not arrive until the middle of the twentieth century. Despite the fact that Franklin Roosevelt and the New Deal oversaw an enormous expansion of the scope and functions of the federal government, the president himself used patronage appointments early on in his first term to ensure that the government was staffed by loyalists... Between the 1880s and the 1920s, the United States gradually dismantled the clientelistic system of party government and laid the foundations of a professional bureaucracy comparable to the ones that had been operating in Europe for several generations. The fact that the United States had a clientelistic system in the first place had to do with the fact that it was democratic earlier than most European countries, and that it had not already created a strong, autonomous state at the point when the franchise was first opened up. A coalition in support of an autonomous bureaucracy eventually emerged, but it had to be put together under strong leadership over an extended period of time, both at a national level and in each city and state that was subject to machine politics.
What does the US experience teach today's developing countries?
The American experience contains some important lessons for contemporary developing countries that want to reform clientelistic political systems and create modern, merit-based, technically competent governments. The first is that reform is a profoundly political process, not a technical one... Clientelism exists because incumbents benefit from the system, either as political bosses who get access to power and resources, or as their clients who get jobs and perks. Dislodging them requires more than the formal reorganization of the government. The experience of public-sector reform mandated by international aid agencies for developing countries at the turn of the twenty-first century demonstrates the futility of a purely technical approach.
A second lesson is that the political coalition favouring reform has to be based on groups that do not have a strong stake in the existing system. Such groups occur naturally as the by-product of economic growth and social change. New business interests that are excluded from the existing patronage system, middle-class professionals lacking access to politics, and civil society groups catering to the needs of underserved populations are all candidates... A third lesson is that while government reform reflects the material interests of the parties involved, whether entrenched patronage politicians or rising middle-class voters, ideas are critical in shaping how individuals see their interests. A middle-class voter could equally well take a proffered government job, or be persuaded that his or her family’s long-term interests are better served by a system that recruits the best possible people on an impersonal basis...A fourth lesson is that reform takes a great deal of time. The Pendleton Act was passed in 1883, but it was not until the 1920s that a large majority of public servants were put under the merit classification system. Even then this pattern was reversed briefly early in the New Deal... Oftentimes reform is spurred by accidental events, like the assassination of James Garfield, or the exigencies of wartime mobilization.
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