DV431 Author Summaries

Dahl (Polyarchy: Participation and Opposition)

1971. Polyarchy: used to describe a form of government in which power is invested in multiple people. It takes the form of neither a dictatorship nor a democracy. Democracy is an ideal, polyarchy is a better approximation of reality...? - Not making a case for polyarchy but arguing that different regimes have different consequences and that these differences matter. - Transition from hegemony to a more competitive polyarchy can yield significant results that to Dahl are important but he does not assume that a shift from hegemony towards polyarchy is always desirable (it is frequently desirable). Desirable because: o Promotes classic liberal freedoms: they promote public contestation and participation, allow to oppose the government, present alternative points of view and choose new leaders. o Broader participation and political competition: allow to change political leadership, different groups can be represented and political competition should allow governments to be more representative. With a broader participation more groups are included in the suffrage and can vote therefore increasing political competition and broadening political representation. o Politicians seek support: as the system becomes more competitive and inclusive politicians seek the support of participatory groups. When suffrage is extended beyond the elite new parties do not rely on personalties and clientelism and become more effective in appealing to the middle class. o Pluralism in policy-making: the greater the opportunities to express, organize, and represent political preferences the greater the number and variety of preferences and interests are represented in policy making. It leads to pluralism and better policy making. o Quality of policies and coercion: the more the population is included in the political system the more difficult it is for a government to adopt or enforce policies that are based on extreme sanctions repression coercion and suppression of freedoms. o Regime differences' consequences: over time the differences in regime may have effects on the beliefs attitudes cultures and personalities of a population thereby affecting the entire value system. He also argues that there is no simple law of unidirectional development. A state could transition from a polyarchy to an autarchy, you do not always transition from hegemony to polyarchy. The conditions for polyarchy are not well known or easily created, there are seven sets of conditions that increase the chances of polyarchy: Historical sequences, Degree of concentration in the socio-economic order, Levels of socio economic development, Inequality, Sub-cultural cleavages, Foreign control, Beliefs of political activists. 13 Democracy, Authoritarianism, and Development What accountability mechanisms exist in democratic contexts and in authoritarian contexts, who do they serve, and what are their advantages and limitations? How do these affect development in various types of democratic and authoritarian regimes?

Wade (Village republics: Economic conditions for collective action in South India)

1988. The conditions for collective action Tendency in peasant studies to identify power relations between peasantry and external groups --> Ignores the extent to which peasants manage their own internal affairs most collective action theories-including Prisoner's Dilemma, Hardin's "tragedy of the commons," and Olson's "logic of collective action"-fail to give accurate predictions in the present case --> sweeping pessimism about voluntary organization is unwarranted. In villages where the potential externalities of water and grazing are high, there has been no move to privatize these resources - this option is largely ruled out on cost grounds, nor does the state lay down rules of resource use - it would in any case be too weak to enforce them. Rather, the villagers themselves have constituted an authority to impose rules of restrained access. So in this case the people who face the problems have been able to devise and sustain rules which serve to keep costs and conflict within tolerable limits. To do so they have created a differentiated and active public core, extending authoritative regulation into village society in the form of water rules, grazing rules, harvesting rules, road maintenance, well repairs, and other things. we would not expect to find effective rules of restrained access organized by the users themselves when there are many users, when the boundaries of the common-pool resources are unclear, when the users live in groups scattered over a large area, when undiscovered rule-breaking is easy, and so on. In these circumstances a degradation of the commons can confidently be expected, and privatization or state regulation may be the only options. The further an actual case deviates from this extreme the more likely will the people who face the problem be able to organize a solution. To spell it out in more detail, the likelihood of successful organization depends on: I The resources the smaller and more clearly defined the boundaries of the common-pool resources the greater the chances of success. 2 The technology the higher the costs of exclusion technology (such as fencing) the better the chances of success. 3 Relationship between resources and user group (i) Location: the greater the overlap between the location of the common-pool resources and the residence of the users the greater the chances of success. (ii) Users' demands: the greater the demands (up to a limit) and the more vital the resource for survival the greater the chances of success. (iii) Users' knowledge: the better their knowledge of sustainable yields the greater the chances of success. 4 User group (i) Size: the smaller the number of users the better the chances of success, down to a minimum below which the tasks able to be performed by such a small group cease to be meaningful (perhaps because, for reasons to do with the nature of the resource, action to mitigate common property problems must be done, if at all, by a larger group). (ii) Boundaries: the more clearly defined are the boundaries of the group, the better the chances of success. (iii) Relative power of sub-groups: the more powerful are those who benefit from retaining the commons, and the weaker are those who favour sub-group enclosure or private property, the better the chances of success. (iv) Existing arrangements for discussion of common problems: the better developed are such arrangements among the users the greater the chances of success. (v) Extent to which users are bound by mutual obligations: the more concerned people are about their social reputation the better the chances of success. (vi) Punishments against rule-breaking: the more the users already have joint rules for purposes other than common-pool resource use, and the more bite behind those rules, the better the chances of success. 5 Noticeability Ease of detection of rule-breaking free riders: the more noticeable is cheating on agreements the better the chances of success. Noticeability is a function partly of 1,3(i), and 4(i). 6 Relationship between users and the state (i) Ability of state to penetrate to rural localities, and state tolerance of locally based authorities: the less the state can, or wishes to, undermine locally based authorities, and the less the state can enforce private property rights effectively, the better the chances of success. 17 Collective Action, Public Goods, and Common Resources Is community based development a viable alternative to an under-providing state? Or is the collective action problem inevitable?

de Soto (The Other Path)

1989. The economic system oppressing most Peruvians is not democratic capitalism but mercantilism (SUPPLY AND DEMAND OF MONOPOLY RIGHTS THROUGH LAWS, REGULATIONS, TAXES, ETC). Democratic capitalism hasn't really been tried in Peru. The poor are voting against the mercantilist system with their feet. In Peru, for example, they are walking into the fragmented and incipient market economies of the extralegal sector or migrating in millions to capitalist countries. If its legal system is reengineered to provide everyone the tools for entrepreneurship, Peru will eventually thrive. If Peruvians do not find a way of incorporating the excluded into an open economy, the excluded will be vulnerable to being railroaded into extreme economic alternatives. 10 Emerging Firms: SMEs, the Informal Sector, and Social Enterprise Is the informal sector a problem or an opportunity? What should be done for or to it?

Haggard (Neoclassical and Dependency Perspectives)

1990. Weakness of Neoclassical theory on NICs (Newly Industrialized Countries): ignore policies and define policymaking as making the right choices Weakness of Dependency theory on NICs: mostly focus on international and class determinants and ignore differences within states' policies that have similar international pressures What is needed is to develop theories of the ways in which domestic political factors relate with policy choices and external constraints Both theories ignore how national forces constrain economic policies and influence state strategies towards international economy Neoclassical theory advises on market-oriented policies for economic success and states that government intervention can lead to distortions. But author states that economic success depends on discrete policies and the economic and political context in which the policies where placed. (ex: East Asian NICs) Dependency theory initiated in order to study the international constraints to local development and how to alleviate them but it ignores the different strategies that developing countries with similar international constraints implement The triple alliance (MNCs, local capital, state) characterizes developed countries not only developing ones Both theories fail to answer: under what conditions will a state encourage foreign investment in specific sectors, increase regulation, or support local capital? 11 States and Markets in Development: Neoclassical & Dependency Theories What roles do states and markets have in development under neoclassical and dependency theories?

Hood (A Public Management for All Seasons?)

1991. Jury is still out on whether NPM is what it is hyped to be but otherwise, it is a highly accepted and popular approach to public management. Emergence of NPM linked to 1) slow down or reverse government growth, 2) privatization and quasi-privatization, 3) automation -ICT 4) international agenda - focus on general issues of public management. NPM - set of broadly similar administrative doctrines which dominated the bureaucratic reform agenda in many OECD countries from the late 1970s. Doctrines of NPM: Hands-on professional management in the public sector. Explicit standards and measures of performance. Greater EMPHASIS on output controls. Shift to disaggregation of units in the public sector, greater completion in the public sector. Stress on private sector styles of management practice, greater discipline and parsimony in resource use 6 Old and New Forms of Public Administration Are there really better ways of providing services to poor people than old style bureaucracy?

Paul (Accountability in Public Services: Exit, Voice and Control)

1992. A positive impact of public accountability on public service is generated by the use of "exit" and "voice" mechanisms in conjunction with control. Exit is more efficient when used in services least affected by market failure Legal and institutional barriers can make difficult the use of voice. (e.g. lack of public hearings) *The concepts of "exit" and "voice" as proposed by Hirschman (1970) 3 Designing Effective Management Systems: Incentives, Authority & Accountability Why should we use different kinds of organisations to solve different kinds of problems?

Putnam (Making Democracy Work: Civic Traditions in Modern Italy)

1993. Argues that distinct political regimes with historically different structures are associated with different levels of civil engagement (measured in membership of societies, parties, free elections, longevity of local associations) and with different levels of social/economic development. Different structures in Northern Italy vs Southern Italy: N: communal republicanism with participatory horizontal bonds of mutual solidarity and collaboration between autonomous, self-governing communities, with high civic engagement of integrated communities with strong levels of trust and honesty, based on strong rule of law. S: norman feudal autocracy, economically successful, but unlikely to develop strong civic communities; vertical bonds of dependency and exploitation. Voluntary cooperation depends on social capital. Norms of generalised reciprocity and networks of civic engagement encourage social trust and cooperation because they reduce incentives to defect, reduce uncertainty, and provide models for future cooperation. Problem: benefits of opportunism and defection of civic engagement rise with further complexity, industrialisation from Shami: "For instance, southern Italy, which was one of Putnam's (1993) case studies, was found to be isolated from the center of the country by the absence of road networks and of any market center located near the hinterlands (Eisenstadt and Roniger 1984). As a result peasants who did not have the option to migrate northward had little choice but to approach the landed nobility to satisfy their needs." 7 Shaping a Responsive State: Democracy, Decentralisation and Effective Governance Has decentralization's potential to improve government responsiveness, effectiveness and efficiency been greatly exaggerated?

Hughes (Public management and administration: an introduction)

1994. Traditional model (Max Weber's theory of a bureaucracy - idea of a distinct professional public service, recruited and appointed by merit, politically neutral and which would remain in office throughout changes in government; Woodrow Wilson -Politicians - make policy; administration - carry it out; Frederick Taylor - scientific management principles - later incorporated into public service. - standardization of tasks, measurement of tasks) was successful and widely emulated; was more efficient and introduced professionalization. However, more relevant to industrial development era, the world has moved on. The pillars of public administration are no longer viewed as adequate to analyze the reality of government. Greater focus on result other than process, responsibility rather than its evasion and on management rather than administration. 6 Old and New Forms of Public Administration Are there really better ways of providing services to poor people than old style bureaucracy?

Tarrow (Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam's Making Democracy Work)

1996. Acknowledges that Putnam has demonstrated how (unevenly) institutional innovations are translated into practice, that institutional performance isn't policy-specific/idiosyncratic, but is coherent among policy sectors/stable over time, that institutional changes have different implications in different socioeconomic and cultural contexts. Yet he criticises that his argument is quite farfetched, the regressions might be too general and directed to his theoretical assumptions. 7 Shaping a Responsive State: Democracy, Decentralisation and Effective Governance Has decentralization's potential to improve government responsiveness, effectiveness and efficiency been greatly exaggerated?

Diamond (Guns, Germs & Steel)

1997. Development comes down to geography, food production, immunity to germs, domestication of animals, and the use of steel. 1 Geography, Values, Factor Endowments, and Institutions Why are some countries rich and others poor?

Sen (Democracy as a Universal Value)

1999. Argues that the most pre-eminent development of the 20th century is the rise of democracy as the pre-eminently acceptable form of governance. Before scholars used to debate whether or not a country was fit to have democracy. Now it is universally accepted even if not universally practiced. Democracy and political liberty have importance in themselves. Further argues that there was never a famine in an independent democracy. Democracy has intrinsic value: Political freedom crucial part of living a good life as a social being. Having these freedoms are central to induce social responses to economic needs. Democracy has instrumental value: Allows people to make their demands and complains and express what they need including economic needs. Democracy has constructive value: Opportunity to learn through the practice of democracy and helps society forms values and priorities. 13 Democracy, Authoritarianism, and Development What accountability mechanisms exist in democratic contexts and in authoritarian contexts, who do they serve, and what are their advantages and limitations? How do these affect development in various types of democratic and authoritarian regimes?

Rose-Ackerman (Corruption and Goverment: Causes, consequences and reform)

1999. Corruption is hard to escape from without making more fundamental changes. It creates economic problems, misallocates resources and costs, it has a negative political economic impact. "o The threat of losing power can induce high officials to become even more corrupt as a means of insuring their economic well-being once they are out of office." "o ... Many anticorruption policies impose costs on the political group that proposes them that exceed the cost borne by those who simply go along with the change. Unless public outcry is very potent and sustained, there is a first-mover disadvantage. Reforming incumbent administrations gain support by advocating change "o The use of the anticorruption banner as a cloak for repression is an especially worrisome aspect of reform in autocracies that lack effective outside checks. In a society where corruption and self-dealing are entrenched, the law may be enforced against dissenters while the top leadership is immune from criticism." "o Reformers must respond to scandals by doing more than punishing the guilty. The challenge is to reduce underlying corrupt incentives. Otherwise anticorruption campaigns become little more than witch hunts that will tend disproportionately to seek out the regime's political opponents (Singh 1997:638). Scandals are an opportunity to mobilize support for institutional changes that have little glamour in themselves" 15 Anti-Corruption and Rule of Law Why do some places have more rule of law than others? Why do some places have less corruption than others? When do anti-corruption and rule of law reforms succeed?

Gallup, Sachs & Mellinger (Geography and Economic Development)

1999. Geography—along with economic and political institutions—continues to matter for economic development. Being tropical, landlocked, densely populated is correlated to being underdeveloped. 1 Geography, Values, Factor Endowments, and Institutions Why are some countries rich and others poor?

Brett (Understanding Institutions and Organizations)

1999. Markets will only succeed where the state provides an adequate regulatory framework infrastructure. Institutions, by producing patterns of behavior, are crucial to solving the problems of collective action amongst individuals. The viability of informal values and rules decreases with the complexity and extent of the organizational system and with corresponding growth in the number of exchanges between strangers. Realization of the importance of governance has resulted in two major initiatives in the international policy debate 1. Recognition of the sig. of democratization to reduce tendencies to inefficiency and corruption 2. Recognition of the weakness of the centralized hierarchically coordinated and top down institutional arrangements which were used by social democratic and command economies 2 Institutional Differentiation, Accountability and Development Management Can we prove that some institutions are more developed than others?

Sokoloff & Engerman (Institutions, factor endowments, and paths of development in the New World)

2000. Factor endowments or initial conditions (not heritage or religion) had enduring impact on long-run paths of institutional and economic development in ex-European colonies of the New World. 1 Geography, Values, Factor Endowments, and Institutions Why are some countries rich and others poor?

Easterly (The Elusive Quest for Growth, and his review of Sach's approach)

2001, 2006. Argues against the notion of the financing gap since it generates perverse incentives (the larger the gap the lower the savings of the recipient). He refutes the short‐run link between investment and growth and argues that aid will be more effective when given to countries that create incentives for saving and growth. Aid does more harm than good, has not led to big growth effects, overlooks the roles of incentives and is allocated toward consumption goods rather than investments as the financing gap theory expects, should be conditional on a country's ability to save. Economic development involves a complex interplay of institutions, imperfect markets, policies, norms, etc. and so cannot be achieved at once as through Sachs's Big Push approach. Bad governance explains slow economic growth. To decrease poverty one needs to understand the roles that incentives play rather than implement top‐down administrative plans. Piecemeal as a better approach than Big Push: specific interventions, improvement of incentives of both sides, experimentation, evaluation and monitoring, and accountability mechanisms. 4 Aid Architecture, Donor Interventions, and Accountability What does aid (usually) achieve? Why? What would a pro-development, incentive-compatible aid regime look like?

McArthur and Sachs (Institutions and Geography: Comment on AJR)

2001. Both institutions and geographically-related variables (e.g. malaria incidence or life expectancy at birth) are strongly linked to GNP/capita. Argue that the evidence presented in Acemoglu, Johnson and Robinson is likely limited by the inherently small sample of ex-colonies and the limited geographic dispersion of those countries. Most regression results point squarely to direct effects of geographically-linked health variables on development controlling for the quality of governance 1 Geography, Values, Factor Endowments, and Institutions Why are some countries rich and others poor?

Keohane (Commentary on the Democratic Accountability of Non-Governmental Organizations)

2002. NGOs can legitimately influence global policy because they are guided by their normative principles. Their main source of legitimacy is independence from government, which would be threatened if they were held accountable to the international governance system. NGOs do not need to be accountable to states because they are guided by their normative principles (link with Kilby). He argues that the fact that NGOs are held accountable through weak mechanisms is not a deficit because they are themselves weak actors, unlike states (in contrary to Spiro's argument). 16 NGOs' Accountability, Legitimacy and Representation International non-governmental organisations must become more accountable if they are to retain their influence and position of trust?

Lindauer & Pritchett (What's the Big Idea? The Third Generation of Policies for Economic Growth)

2002. Studies ineffective policy reform in Latin America: sporadic and sputtering growth and stagnant wages and the evolution of the conventional wisdom on the development community (big ideas are based on facts or events that occurred during the time). "Examining the past for hints about the future" The end of Big Ideas: One size does not fit all. No longer a set of recommendations, to achieve development a country must tackle more than just achieving the propositions of the Washington Consensus. Author argues this should lead to less polemic debates due to a decrease in the necessity to label successes and failures. "...there are some universal principles about desirable economic policies, but that these principles can be achieved in a number of different ways. The mistake is to confuse the underlying principle with a particular institutional form..." p. 16. Author argues that growth regression research, which has been used in the past for policy recommendations, is useless for policymaking because these are not empirically stable over time nor across countries (since the range of policy improvements make a difference and outcomes can be consequences of many variables) and because they are not correctly specified. Also because the variables on the right of the regression (corruption, inequality investment, inflation, etc.) are usually not policy but variables that are not under anyone's control and most of the time are intermediate outcomes (result of interaction between policies and events and don't have direct policy implications). "...none of the regressions relating growth to policy actions gives the right policy for any country" p. 23 11 States and Markets in Development: Neoclassical & Dependency Theories What roles do states and markets have in development under neoclassical and dependency theories?

Spiro (Accounting for NGOs)

2002. The power of NGOs in world politics is now greater so they need to be included in the formal global decision-making structures to be made more accountable - 'the inclusion paradox' (this argument goes against that of Keohane). Distinguishes between NGOs' internal and external accountability. 16 NGOs' Accountability, Legitimacy and Representation International non-governmental organisations must become more accountable if they are to retain their influence and position of trust?

Rodrik (What do we learn from country narratives?)

2003. Answers from country narratives: Quality of institutions is key. Government's policy towards trade doesn't play nearly as important a role as the institutional setting. Geography is not destiny. Good institutions can be acquired, but doing so often requires experimentation, willingness to depart from orthodoxy and attention to local conditions. The onset of economic growth doesn't require deep and extensive institutional reform. Sustaining high growth in the face of adverse circumstance requires ever stronger institutions. 2 Institutional Differentiation, Accountability and Development Management Can we prove that some institutions are more developed than others?

Acemoglu, Johnson & Robinson (An African Success Story: Botswana)

2003. Botswana has developed due to a juxtaposition of different factors. good institutions laid the basis: -emerging out of precolonial structures (accountable feedback mechanism placing constraint on political elite) positively influenced by light colonialism (allowed preservation of local traditional structures, established taxation -as foundation for public service provision and property rights). Resource endowments (diamonds) that were reinvested, instead of being exploited (rent-seeking) Political will that was committed to inclusive growth (rural areas). Major concerns address the sustainability of economic growth. Somalia had also light colonialism, but didn't possess functional, precolonial institutions. This caused instability, poor economic performance. shows that limited effect of colonialism itself doesn't promote building of good institutions, but in Botswana interaction with precolonial institutions allowed creation of strong private property rights and inclusion of other members limiting conflict of interests. 8 Analytical Narratives of Development Failure and Success Why do some countries 'de-develop'? Why do others succeed? Can the successes be replicated?

Qian (How Reform Worked in China)

2003. Didn't take traditional path (based on neoliberal economic agenda of liberalisation, privatisation, democracy), not only concentrated on the coastal site; liberalisation, opening up and FDI occurred, but wasn't the major driver of growth. Transitional, broad reforms "without losers" (also across rural areas due to agricultural reform of 1980s). Not best initial conditions (moderate human capital, no big resource endowments). Instead of enforcing "perfect institutions", imperfect but sensitive institutions can perform; institutions have to fit with political and economic reality of country to be efficient; institutions shall constantly be adapted. China can be used as a contrasting example to the assumption that there is a one-size-fits-all approach. Innovative institutional reforms improved efficiency and complemented existing institutions; they might be more costly than best-practice institutions, yet at the same time they ensure that no losers are left behind, while they are slowly adapted, upgraded or substituted (Privatisation of TVEs when efficiency was decreasing; abolishment of planned track approach and substitution by completely free market while compensating potential losers) 8 Analytical Narratives of Development Failure and Success Why do some countries 'de-develop'? Why do others succeed? Can the successes be replicated?

Ebrahim (Accountability in Practice: Mechanisms for NGOs)

2003. NGOs' claims on legitimacy tend to be based more on their values than actual monitoring and assessment of their achievements. Delineates various accountability mechanisms used by NGOs and their advantages and disadvantages. Conclusion: Most accountability mechanisms serve a functional purpose (they focus on short-term impacts or accounting for funds), but focus should shift to more strategic processes of accountability, which are necessary for long-term socio-political change (like Kilby). Accountability is both about being held responsible by external actors and standards, as well as about taking internal responsibility for actions. 16 NGOs' Accountability, Legitimacy and Representation International non-governmental organisations must become more accountable if they are to retain their influence and position of trust?

Chang (Rethinking Development Economics - The Market, The State, and Institutions)

2003. Now developed countries employed interventionist policies at earlier state of development. States are always involved in creating new markets (e.g. telecoms, software, wages/interests rates are politically determined, etc. Impossible to depoliticize markets without tampering with democratic processes and state mandates thus neo-liberal approaches flawed. Offers a solution -institutionalist political economy (IPE) approach. All markets are based on institutions that regulate who can participate, legitimize objects of market exchange and ownership, define rights and obligations for agents and regulate exchange processes. Politics does not inevitably generate state action that goes against market rationality. Thus, IPE is proposed as an alternative framework to theorise the role of the state in economic development. "Emphasizing the institutional nature of the market requires that we have to bring politics explicitly into the analysis of the market, not just into the analysis of the state, and stop pretending - as the neoliberals do - that markets need to be, and can be, 'depoliticized'. Markets are in the end political constructs, in the sense that they are defined by a range of formal and informal institutions that embody certain rights and obligations, whose legitimacy (and therefore contestability) is ultimately determined in the realm of politics. This is why the 'political economy' in IPE is political economy in a much more fundamental sense than the neoclassical political economy that neoliberal economists deploy." 12 States and Markets in Development: State-Directed Approaches What roles do states and markets have in economic transition in state-directed approaches?

Easterly (The Political Economy of Growth without Development: A case study of Pakistan)

2003. Pakistan's case can be used to illustrate the following points: resistance to well-intentioned government and donor programs underlines the principle that social payoff to foreign aid is low in polarised societies. lack of social development and welfare (health, education) can increase social inequities across rural/urban, provincial, gender divides and lower productive potential of economy. pc income growth is possible without commensurate human capital accumulation (based on education indicators), possibly due to skilled managerial elite and agricultural growth) Two major political economy models can explain growth without development: 1. Dominance by one elite that doesn't support HC investment in masses, 2. Division into linguistic, religious, regional factions has inhibited public provision of social services in Pakistan 8 Analytical Narratives of Development Failure and Success Why do some countries 'de-develop'? Why do others succeed? Can the successes be replicated?

Sen (Institutions for Sustainable Development)

2003. The coordination of human behavior that is required for people and assets to thrive is particularly dependent on institutions that sustain this coordination by channeling interests, and by shaping the quality and effectiveness of growth. They must pick up signals about needs and problems— particularly from the fringes; this involves generating information, giving citizens a voice, responding to feedback, and fostering learning. It must also balance interests—by negotiating change and forging agreements, and by avoiding stale mates and conflicts. And they must execute and implement solutions—by credibly following through on agreements. ? 3 Designing Effective Management Systems: Incentives, Authority & Accountability Topic: Why should we use different kinds of organisations to solve different kinds of problems?

Mansuri & Rao (Community-based and driven Development: A Critical Review)

2004. Community-based D: umbrella term for projects that actively include beneficiaries in their design and management Community-driven D: projects in which communities have direct control over key decisions (e.g. management of investment funds) o Big potential benefits: Enhance sustainability, improve efficiency and effectiveness, allow scale up, be more inclusive, build social capital and governance, complement markets and public sector by increasing information and resources to the poor and strengthening civil capacity (reversing existing power relations) o Cornerstone of the WB's Comprehensive Development Framework 17 Collective Action, Public Goods, and Common Resources Is community based development a viable alternative to an under-providing state? Or is the collective action problem inevitable?

Glaeser (La Porta, Lopez-de-Silane & Shleifer: Do Institutions Cause Growth?)

2004. Human capital is more important for growth than institutions. Poor countries escape poverty through good policies (often by dictators) and subsequently improve their political institutions. 1 Geography, Values, Factor Endowments, and Institutions Why are some countries rich and others poor?

World Development Report (Making Services Work for Poor People)

2004. Poor people should be actively engaged in service provision through increasing their individual purchasing power, increasing their collective power over providers by organizing in groups and increasing their capacity to aspire i.e. increasing the information needed to develop their personal sense of capability or entitlement. Without this, resources are wasted and their well-being undermined. Scale up but also be brave to scale back -abandon failures. No one size fits all solution - however, bad programmes are unaffordable especially in poor countries; continuously monitor, enable and give feedback, measure outcomes. Short route of accountability - direct citizen engagement in service provision. Long route of accountability - citizens provide mandates to policy-makers to design services to respond to citizens' needs. ● Relative lack of public accountability in developing countries must be improved to enhance the efficiency and effectiveness of public services and governance ● Successful services for poor people emerge from institutional relationships in which the actors are accountable to one another ○ Accountability: delegation, finance, performance, information ● Four broad roles in the chain of service delivery: ○ Citizens/clients, voters ○ Politicians/policy makers - ministers of finance, health and education ○ Organizational providers, health and sanitation providers ○ Frontline professionals - performance, and enforceability answerability (getting information about performance) 6 Old and New Forms of Public Administration Are there really better ways of providing services to poor people than old style bureaucracy?

World Bank Development Report (Making Services Work for Poor People)

2004. The basic argument of this paper is that public accountability is an important determinant of public service performance and its impact on performance can be augmented by moving away from exclusive reliance on HC mechanism such as monitoring and use of organization incentives. Whether the public will resort to exit or voice will depend on the relative costs associated with these options and the expected value to them of the performance improvement resulting from their use in a specific context (1057) When a public service operates as a local monopoly due to spatial barriers and the public involved is characterized by low incomes and legal, informational, and institutional barriers, improved accountability can be achieved through the use of voice (1057) o Use of voice is likely to be stimulated by the intervention of agents and organizations In public utilities and other services where the exit option is unavailable, governments need to explore the scope for providing voice mechanisms to enhance accountability (1058) outside the local community. 3 Designing Effective Management Systems: Incentives, Authority & Accountability Why should we use different kinds of organisations to solve different kinds of problems?

Manion (Corruption by design: Building clean government in mainland China and Hong Kong)

2004.Ceteris paribus, corruption associated with: Less investment, growth, and income, higher child mortality, less gov spending on education, and weaker political system support. Evidence that British colonial heritage, Protestantism, economic liberalization, and higher per capita income contribute to less corruption. Disagreement on relationship with trade openness, administrative centralization, and country size. But subjective measures are problematic. CPI: Assumes single dimension to corruption and source bias toward multinational business. 15 Anti-Corruption and Rule of Law Why do some places have more rule of law than others? Why do some places have less corruption than others? When do anti-corruption and rule of law reforms succeed?

Svensson (Eight questions about corruption)

2005. 1. Corruption = outcome that reflects legal, economic, cultural, and political institutions. 2. Bribes are like a tax but provide no money to public coffers and generate firm-specific (not universal) benefits. 3. Corrupt countries tend to have lower human capital, more closed, more regulation to entry to market and the press - but income doesn't explain all the variation. 4. Paying bureaucrats higher wages only reduces corruption if there's strong 3rd party enforcement (otherwise they'll just ask for higher bribes). 5. Increasing competition among firms, officials, and public service provides can either reduce or increase corruption. 6. Although most believe that corruption slows growth (vs. those who say it helps get things done), the macro evidence is inconclusive. 7. Attempts to stamp out corruption difficult because you rely on the very legal and financial institutions that are weak or corrupt. Alternatives: private and public enforcement or deregulation. 8. There are three different types of corruption measures (highly correlated, differ mostly on what years and countries are included). 15 Anti-Corruption and Rule of Law Why do some places have more rule of law than others? Why do some places have less corruption than others? When do anti-corruption and rule of law reforms succeed?

Bardhan (Institutions matter, but which ones?)

2005. Authors first try to extend the existing quantitative literature about the effect of the institutions that protect property rights on economic development across countries by introducing a new instrumental variable (colonial settler mortality seen as unsatisfactory)... A historical density of population variable is therefore likely to be a 'weak instrument'. 1 Geography, Values, Factor Endowments, and Institutions Why are some countries rich and others poor?

Eggertsson (Imperfect institutions: possibilities and limits of reform)

2005. Critical barrier to growth in LICs is the lack of appropriate institutional support for new production technologies. Transaction costs and uncertainty about winners and losers after reform prevent institutional reform. In the case of growth-oriented governments, micro-level incompatibility, macro-level incompatibility and ideological drift can lead to failures to implement reform. Uses new institutional economics as his theoretical framework and argues that a country's growth depends on both social and production technologies. 5 Overcoming Barriers to Development What are some of the key barriers to development, and why do they affect some places more than others? Can these be transformed or allayed?

Bueno de Mesquita, Downs (Development and Democracy)

2005. It used to be a given that economic development led inevitably to democracy as a newly empowered middle class demands more control over its rights, idea coming from Lipset although he warned that it was true in western Europe, not necessarily everywhere. "What explains the often lengthy lag between the onset of economic growth and the emergence of liberal democracy? The answer lies in the growing sophistication of authoritarian governments." Development bodies and the World Bank should reconsider just pushing for greater economic freedom because it is "unlikely to have much political payoff." How to stop a revolution: Deny these 4 goods while continuing to provide other services necessary for economic growth 1. Political rights 2. Human rights 3. Press freedom 4. Accessible higher education The recipe for autocratic success 1. The suppression of coordination goods is an effective survival strategy. 2. Today's autocrats tend to suppress coordination goods much more consistently than other public goods. 3. The greater the suppression of coordination goods, the greater the lag between economic growth and the emergence of liberal democracy. 4. Except at the highest levels of per capita income, significant economic growth can be attained and sustained even while the government suppresses coordination goods. 14 Democratization, Authoritarian Resilience and Regime Change Why do authoritarian regimes at times democratize, liberalize, collapse, or stabilize? Do limited governance and institutional reforms tend to strengthen or weaken them? What role, if any, does development/culture/society play?

Parker & Kirkpatrick (Privatisation in Development Countries- A Review of the Evidence and the policy Lessons)

2005. Lessons for policy: Privatization began as a policy for developed countries, which rely on mature capital markets, stock exchanges, venture capitalist, banks, functioning legal system, property rights, and business ethics. Most developing countries lack these characteristics, so it impacts performance differently on MDCs and LDCs. Privatization objectives: MDCs: increase efficiency through increases in productivity while decreasing costs of production. LDCs: should be increase in efficiency, but most importantly, poverty reduction and sustainable economic development. Impact of privatization on poverty is unpredictable and inconclusive: can decrease poverty if it leads to increases in income and services or increase poverty if it leads to increases in prices and taxes and decreases on employment. Privatization is used as an economic answer to what is actually a political problem in developing countries Concluding remarks: Objectives should focus on poverty reduction and sustainable economic development, Institutional capacity should be evaluated and the scale, coverage, and sequencing of privatization should be consistent with such evaluation and the available resources (capital and management skills), Privatization needs to be complemented by policies that promote market competition and state regulatory capacity 11 States and Markets in Development: Neoclassical & Dependency Theories What roles do states and markets have in development under neoclassical and dependency theories?

Sachs (The End of Poverty)

2005. There is insufficient donor financing for MDGs to be achieved and argues for a global compact. Extreme poverty can be eliminated through tested and targeted investment which should be part of a global compact between rich and poor countries, centered around MDG's poverty reduction strategy. LDCs have poverty traps and aid can help them out of them. End world poverty through a big push (holistic, quick) that will break LDCs' poverty trap. Poverty traps explain slow economic growth not bad governance. 4 Aid Architecture, Donor Interventions, and Accountability What does aid (usually) achieve? Why? What would a pro-development, incentive-compatible aid regime look like?

Prahalad (The Fortune at the Bottom of the Pyramid)

2006. "What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable." "The strength of these innovative approaches, as you will come to appreciate, is that they tend to create opportunities for the poor by offering them choices and encouraging self-esteem." The socialization/ideology/experience of each group trying to eradicate poverty means that each one is conditioned by its own dominant logic. There is money at the BOP: China/India/Brazil/Mexico/Russia/Indonesia/Turkey/S.A./Thailand GDP (PPP) = $12.5 trillion > Japan/Germany/France/UK/Italy. Poverty penalty can be unlocked by private business, right now the poor pay a premium living in high-cost ecosystems (local monopolies, inadequate access, poor distribution, strong traditional intermediaries) 10 Emerging Firms: SMEs, the Informal Sector, and Social Enterprise Is the informal sector a problem or an opportunity? What should be done for or to it?

Stern (Stern Review: The Economics of Climate Change Executive Summary (Half 1))

2006. 1. The scientific evidence points to increasing risks of serious, irreversible impacts from climate change associated with business-as-usual (BAU) paths for emissions. 2. Climate change threatens the basic elements of life for people around the world - access to water, food production, health, and use of land and the environment. 3. The damages from climate change will accelerate, as the world gets warmer. 4. The impacts of climate change are not evenly distributed - the poorest countries and people will suffer earliest and most. And if and when the damages appear it will be too late to reverse the process. Thus we are forced to look a long way ahead. 5. Climate change may initially have small positive effects for a few developed countries, but is likely to be very damaging for the much higher temperature increases expected by mid- to late-century under BAU scenarios. 6. Integrated assessment models provide a tool for estimating the total impact on the economy; our estimates suggest that this is likely to be higher than previously suggested. 7. Emissions have been, and continue to be, driven by economic growth; yet stabilization of greenhouse-gas concentrations in the atmosphere is feasible and consistent with continued growth. 8. Achieving these deep cuts in emissions will have a cost. The Review estimates the annual costs of stabilization at 500- to be around 1% of GDP by 2050 - a level that is significant but manageable. 9. Resource cost estimates suggest that an upper bound for the expected annual cost of emissions reductions consistent with a trajectory leading to stabilization at 550ppm CO is likely to be around 1% of GDP by 2050. 10. Looking at broader macroeconomic models confirms these estimates. 11. The transition to a low-carbon economy will bring challenges for competitiveness but also opportunities for growth. 12. Reducing the expected adverse impacts of climate change is therefore both highly desirable and feasible. 17 Collective Action, Public Goods, and Common Resources Is community based development a viable alternative to an under-providing state? Or is the collective action problem inevitable?

Stern (Stern Review: The Economics of Climate Change Executive Summary (Half 2))

2006. 13. Policy to reduce emissions should be based on three essential elements: carbon pricing,technology policy, and removal of barriers to behavioral change. 14. Establishing a carbon price, through tax, trading or regulation, is an essential foundation for climate-change policy. 15. Policies are required to support the development of a range of low-carbon and high-efficiency technologies on an urgent timescale. 16. The removal of barriers to behavioral change is a third essential element, one that is particularly important in encouraging the take-up of opportunities for energy efficiency. 17. Adaptation policy is crucial for dealing with the unavoidable impacts of climate change, but it has been under-emphasized in many countries. 18. An effective response to climate change will depend on creating the conditions for international collective action. 19. Creating a broadly similar carbon price signal around the world, and using carbon finance to accelerate action in developing countries, are urgent priorities for international co-operation. 20. Decisions made now on the third phase of the EU ETS provide an opportunity for the scheme to influence, and become the nucleus of, future global carbon markets. 21. Scaling up flows of carbon finance to developing countries to support effective policies and programs for reducing emissions would accelerate the transition to a low-carbon economy. 22. Greater international co-operation to accelerate technological innovation and diffusion will reduce the costs of mitigation. 23. Curbing deforestation is a highly cost-effective way of reducing greenhouse gas emissions. 24. Adaptation efforts in developing countries must be accelerated and supported, including through international development assistance. 25. Building and sustaining collective action is now an urgent challenge. 26. There is still time to avoid the worst impacts of climate change if strong collective action starts now. 17 Collective Action, Public Goods, and Common Resources Is community based development a viable alternative to an under-providing state? Or is the collective action problem inevitable?

Heald (State Law and Vigilantism in Northern Tanzania)

2006. Analysis of the sungusungu groups in the Sukuma and Nyamwesi villages. This is a collective form of policing that emerged in the 1980s in some areas and later in 1990s in Northern Tanzania. They have become part of the administrative structure of vast parts of rural Tanzania. Argues that sungusungu were created not against the state but were operating in the power vacuum of the weak state. The alliance with the state was crucial and it modified the very nature of the state power since they ceded a lot of power back to the local communities. The political and administrative arm of the government supported them but not the police and judiciary since it was challenging their own power because people were taking the law into their own hands. The administration even allowed sungusungu to codify their own laws and set out their own punishment suspending parts of the national penal code. Hence the sungusungu have a quasi-legal status and this is a situation of legal pluralism. 18 Community Based Organisation and Informal Service Delivery Systems Should development practitioners make more use of informal service delivery systems than they often do?

Guha-Khasnobis (Kanbur & Ostrom: Beyond Formality and Informality)

2006. Conceptualization of economic activities along two dimensions: the extent to which it interacts with or comes into the net of the structures of official government at the national and local levels and the extent to which an activity and the interaction among its constituent individuals are structured according to a predictable framework. These two dimensions interact. Regarding policy making it is about obtaining the "right reach" of the government which has to take into account the objectives of the interventions, its implementation and the response of the structuring of activity to this intervention. Authors propose that the informal and formal continuum applies strictly to the continuum between relatively high and relatively low levels of the reach of official governance mechanisms suitably specific and measured in each context. But they warn that informal does not mean unstructured and chaotic and does not invite policy intervention on those grounds. This leads to bad interventions and does not address existing structures. The reach of the government will be a good or a bad thing depending on the context. More government reach is not always better. 18 Community Based Organisation and Informal Service Delivery Systems Should development practitioners make more use of informal service delivery systems than they often do?

Callamard (Politics, Principles and Innovation - NGO Accountability and the Humanitarian Accountability Partnership: Towards a Transformative Agenda)

2006. HAP has made three main contributions to accountability in humanitarian operations: it has redefined accountability as accountability to beneficiaries, recognised that the duty of accountability falls on different entities, and proposed mechanisms for collective self-regulation by humanitarian organisations. • The fact that HAP has given precedence to accountability to affected communities (rather than donor-state-agency relations) is a positive development. • Argues that agencies should set up mechanisms that allow them to hear complaints from beneficiaries and respond to them • 'To be accountable presupposes recognising that disaster-affected populations have rights (to information, participation), dignity and autonomy & requires questioning one's own power and how this is exercised' 16 NGOs' Accountability, Legitimacy and Representation International non-governmental organisations must become more accountable if they are to retain their influence and position of trust?

Magaloni (Voting for Autocracy: Hegemonic Party Survival and its Demise in Mexico)

2006. How do hegemonic-party autocracies sustain their rule and what is the process by which they undergo democratization? Mass support (65% supermajority allowing for constitutional change) + Elite Unity (image of invincibility, spoils distribution to loyal, raise costs of entry) + Electoral Support (employ electoral institutions as a means to regularize payments to supporters/punish enemies) + Opposition Coordination Dilemmas Coordination goods = Political rights, Human rights, Press freedom, Broad access to higher education hegemonic party regimes: the Mexican Institutional Revolutionary Party (PRI) was one of the longest-lived autocratic regimes of the twentieth century. "The PRI governed for seventy-one years, from1929, when the precursor to the party was created, until 2000, when the PRI lost the presidency to the long-standing opposition party, the National Action Party (PAN)." - still had multiparty elections the whole time. four functional roles of elections in autocratic regimes: "First, autocratic elections are designed to establish a regularized method to share power among ruling party politicians. The Mexican autocracy was unique in that elections were employed to replace even the highest office, the presidency... Second, elections are meant to disseminate public information about the regime's strength that would serve to discourage potential divisions within the ruling party. By holding elections regularly, winning them by huge margins, painting the streets and towns all over the country in the party's colors, and mobilizing voters in great numbers to party rallies and the polls, the PRI sought to generate a public image of invincibility... The third functional role of elections in hegemonic-party autocracies is to provide information about supporters and opponents of the regime...The fourth functional role of elections in an autocratic regime is to trap the opposition, so that it invests in the existing autocratic institutions rather than challenging them by violent means." 14 Democratization, Authoritarian Resilience and Regime Change Why do authoritarian regimes at times democratize, liberalize, collapse, or stabilize? Do limited governance and institutional reforms tend to strengthen or weaken them? What role, if any, does development/culture/society play?

World Bank Development Report (Equity, institutions, and the development process)

2006. Institutions underpinning property rights have a causative influence on long run development. Transitions to more equitable institutions sometimes created by colonialism or military conquest, but can also evolve through good decisions, virtuous paths, and intrinsic dynamics of development processes. 2 Institutional Differentiation, Accountability and Development Management Can we prove that some institutions are more developed than others?

Kilby (Accountability for Empowerment: Dilemmas Facing Non-Governmental Organizations)

2006. NGOs' ''downward'' accountability to their constituents (beneficiaries of their work) is crucial for their effectiveness as empowerment agents. Looks at NGOs' accountability to their values, their constituency and downward accountability to their beneficiaries. NGOs have multiple accountabilities which are sometimes contradictory. NGOs' worldview or core values ('Weltanschauung') shape how they conceive of their accountability obligations. 3 issues faced by NGOs' downward accountability: they are not required by law/regulations to provide the beneficiaries with control for accountability; they have 'required' accountability to other stakeholders (government, supporters) which affects their accountability to their constituents; the broad values-base, worldview of an NGO determines its approach to downward accountability. Argues that informal processes are insufficient, his findings suggest that more structural (formal) links deliver stronger empowerment outcomes, because they provide an opportunity for 'rectification' or imposing a cost An NGO's worldview has to reflect views of constituents so that they are genuine with the openness of 'downward' accountability mechanisms The accountability relationship of NGOs should be re-examined to move away from the accountability to donors and supporters. 16 NGOs' Accountability, Legitimacy and Representation International non-governmental organisations must become more accountable if they are to retain their influence and position of trust?

Guha-Khasnobis (& Ahuja: Micro-Insurance for the Informal Economy Workers in India)

2006. Poor people are very vulnerable to risk especially in terms of life and health so there is a real need to provide them with insurance. In India the response has been the rise of micro-insurance. It is a good strategy but needs more regulations and needs to be further expanded in order to reach more people. How to ensure better coverage is still debated. However, microfinance in general is still being debated. Nodal agencies help formal insurance companies overcome informational disadvantage and the high transaction costs associated with providing insurance to low income people to the poor and to people living in remote rural areas. - This represents a hybrid institutions and a hybrid solution: benefits of formal insurance with prepaid organized schemes which is the modern institutions and is coupled with the use of local information and resources to design appropriate cost effective schemes. Nodal agencies play an intermediate role and generate both the demand for insurance and the supply: o They generate the demand by organizing and training the poor and by giving them a voice since the poor are often those that are not seen. o They generate the supply by helping formal insurance companies reach these people. o Hence this is a demand supply development. 18 Community Based Organisation and Informal Service Delivery Systems Should development practitioners make more use of informal service delivery systems than they often do?

Collier (The Bottom Billion, Bad Governance in a Small Country)

2007. Bad governance hurts both the country and neighbouring countries, as well as the international community itself. More educated and larger population offers a way out. Better policies will benefit not just the country itself, but also its neighbours and the international community. 5 Overcoming Barriers to Development What are some of the key barriers to development, and why do they affect some places more than others? Can these be transformed or allayed?

Rodrik (One Economics, Many Recipes: Globalization, Institutions and Economic Growth)

2007. Countries need institutional reform that is more narrow and not too broad. There is no single root economic reform that countries should follow. Diagnostic approach is being applied, we've said goodbye to the Washington Consensus. 2 Institutional Differentiation, Accountability and Development Management Can we prove that some institutions are more developed than others?

Collier (The Bottom Billion, Landlocked with Bad Neighbours)

2007. Countries will be stuck in a poverty trap if they are landlocked, have bad neighbours, are amidst civil conflict and have natural resources. Governments therefore cannot control development strategies on their own, these also depend on neighbouring countries and international donors. 5 Overcoming Barriers to Development What are some of the key barriers to development, and why do they affect some places more than others? Can these be transformed or allayed?

Collier (The Bottom Billion, Resource Trap)

2007. Dutch disease and volatility in commodity prices. Resource rents are likely to result in autocracies meaning governance is a key problem. A strong institutional framework with strong checks and balances is needed to deal with the 'resource curse', but it is difficult to create this domestically if resources are discovered in a weak institutional environment. 5 Overcoming Barriers to Development What are some of the key barriers to development, and why do they affect some places more than others? Can these be transformed or allayed?

Smillie (Not accountable to anyone? Collective action and the role of NGOs in the campaign to ban "blood diamonds")

2007. NGOs managed to play an important role in the global campaign to regulate the diamond industry because they were able to collaborate with other main actors on the basis of mutual accountability. The example of the Kimberley process illustrates three accountability issues: the power of mutual accountability arrangements, accountability between NGOs and their funders and NGOs' legitimacy in interfering with governments and the private sector. It also shows what types of accountability mechanisms NGOs can use to hold the private sector and governments to account. The Kimberley Process shows how mutual accountability (mutual interest and commitments) can have a great impact in practice. The author focuses more on the types of accountability mechanisms NGOs can use to hold the private sector and governments accountable, rather than making NGOs themselves accountable (slightly similarly to Keohane, who also believes that the main role of NGOs is holding governments to account) 16 NGOs' Accountability, Legitimacy and Representation International non-governmental organisations must become more accountable if they are to retain their influence and position of trust?

Collier (The Bottom Billion, Conflict Trap)

2007. Poverty causes conflict as much as conflict causes poverty. These countries cannot break out of the conflict and coup traps domestically, so international intervention is needed. 5 Overcoming Barriers to Development What are some of the key barriers to development, and why do they affect some places more than others? Can these be transformed or allayed?

Treisman (The Architecture of Government: Rethinking Political Decentralisation)

2007. Results of decentralisation are indeterminate and not generalisable it depends on local context, whether decentralisation will have positive effects. PRO Administrative efficiency PRO local competition among governments PRO fiscal incentives PRO democratisation PRO check balances and protection of individual freedoms in decentralised orders by strong local governments PRO veto players and change PRO local information and policy innovation PRO ethnic conflicts CONTRA fiscal pressures CONTRA fiscal coordination 7 Shaping a Responsive State: Democracy, Decentralisation and Effective Governance Has decentralization's potential to improve government responsiveness, effectiveness and efficiency been greatly exaggerated?

Stiglitz (Making Globalization Work)

2007. The problem is not with globalisation itself but in the way globalisation has been managed: 'economics has been driving it, but politics has shaped it' (the advanced industrial countries set the rules of globalisation so that they favour them). The system therefore needs to be reformed, but this will not be easy, because those who benefit will resist change and they are very powerful. Two Faces of Globalisation: globalisation may have increased countries' GDPs, but this wealth didn't trickle down to the majority of their populations ('The worry was that globalisation might be creating rich countries with poor people'). Critiques of globalisation - 5 concerns were raised in relation to economic globalisation: 1. The rules of the game that govern globalisation are unfair, specifically designed to benefit the advanced industrial countries. 2. Globalisation advances material values over other values, such as a concern for the environment or for life itself 3. The way globalisation has been managed has taken away much of the developing countries' sovereignty and their ability to make decisions themselves in key areas that affect their citizens' well-being. In this sense, it has undermined democracy. 4. While the advocates of globalisation have claimed that everyone will benefit economically, there is plenty of evidence that there are many losers in both developing and developed countries (e.g. numbers of poor people globally are rising) 5. The economic system that has been pressed upon the developing countries is inappropriate and damaging (it imports the American capitalist model) Countries with natural resources are often not democratic so the revenues from these resources are not divided evenly amongst the population, but are appropriated by a few. In turn, the appropriated wealth helps these select few to stay in power. Three key policies need to be implemented to avoid the natural resource curse: ensuring that the public gets most of the profits from the resources, spending the money wisely, and avoiding the perils of Dutch disease by converting less foreign currency into domestic currency (to avoid depreciation), meaning that countries should finance local expenditures with local revenues and set up stabilisation funds. 5 Overcoming Barriers to Development What are some of the key barriers to development, and why do they affect some places more than others? Can these be transformed or allayed?

Yunus (Creating a World Without Poverty: Social Business and the Future of Capitalism)

2008. Argues for social businesses as a way to alleviate poverty. Argues that although necessary and important, governments, NGOs, multilateral organizations, and firms thorugh their CSR interventions cannot solve these issues by themselves. There needs to be cooperation between all of these actors. In organizational structure, this new business is basically the same as existing PMB (profit making business)... But its underlying objective—and the criterion by which it should be evaluated—is to create social benefits for those whose lives it touches. Aims for full cost recovery or more. Social Business Profits Stay within the Business - Differ from charity in that it has owners who are entitled to recoup their investments and is self-sustaining. SO it is non-loss and non-divided organizations, where surpluses are reinvested, enabling their sustainability. Create the Capacity to Consume - traditional approach of providing for free rarely solves problem. 1. Affordability - Ex: single-serve packaging, Casas Bahia credit rating system, Cemex do-it- yourself 2. Access - open after work day ends, intense geographical distribution (walking distance) 3. Availability - distribution efficiency needs to be there to meet demand with cash had on hand (not stable) 10 Emerging Firms: SMEs, the Informal Sector, and Social Enterprise Is the informal sector a problem or an opportunity? What should be done for or to it?

Stiglitz (Is There a Post Washington Consensus Consensus?)

2008. Author argues that the only current consensus is the failure of the Washington Consensus. He explores the underlying reasons for its failure Markets on their own can't lead to efficient outcomes in early stages of development due to the presence of externalities, information asymmetries, imperfect capital markets, public goods, and learning... all of these require the intervention of the state. The success of the East Asian NICs support this as evidence. Policies relied on market fundamentalism (which wasn't aligned with economic theory) and it followed a political agenda more than an economic one. It developed as a reaction to the failures of the state but it went to far in the opposite direction. Washington consensus limited its objective to increases in GDP and efficiency while ignoring equity, which shouldn't have since the theory of trickle down effect has proven to be unsuccessful and because equity and efficiency have proven to be interlinked. Author argues that the post Washington Consensus consensus should: o Involve to a greater extent the developing world (their realities, their perceptions, etc.) o Eliminate one size fits all prescriptions o Emphasize the necessity of the balanced role of the government and the market o Include room for developing countries to experiment and adjust o Strengthen market and state institutions o And include measurements such as equity, environmental and social sustainability. o Barcelona Conference 11 States and Markets in Development: Neoclassical & Dependency Theories What roles do states and markets have in development under neoclassical and dependency theories?

Rodrik (One Economics, Many Recipes: Fifty years of Growth [and Lack Thereof]: An Interpretation)

2008. Growth-promoting policies tend to be context specific, but his approach is to focus on general features of successful growth strategies. Two key arguments: The only requirement for good institutions is that they deliver first-order economic principles*, but the form of these institutions is not prescribed = room for creativity Initiating and sustaining growth requires different sets of policies *protection of property rights, market-based competition, appropriate incentives, sound money, and so on do not map into unique policy packages 5 Overcoming Barriers to Development What are some of the key barriers to development, and why do they affect some places more than others? Can these be transformed or allayed?

Williamson (A Short History of the Washington Consensus)

2008. The origins of the Washington Consensus (as a paper for a conference to examine new set of policies appropriate for OECD and how these had replaced the 1950s basis for development for LA), how it has been misinterpreted, and the new agenda for Latin America. Did not contain all of the answers nor was it intended to. 11 States and Markets in Development: Neoclassical & Dependency Theories What roles do states and markets have in development under neoclassical and dependency theories?

Brett (State Failure and Success in Uganda and Zimbabwe: The Logic of Political Decay and Reconstruction in Africa)

2008. The two cases of Uganda and Zimbabwe show the difficulty to sustain economic growth with predatory regime/a non-legitimised regime that isn't committed to promoting economic reform policies or to redistribute any gains. Political instability reduces FDI, etc. Both countries engaged in vicious circles that can only be escaped by creating a government that has broad support in order to establish stability to start building a functioning economy. Both cases have elements that support both that support both neoliberal and dependency theories. One-sided theoretical assumptions and prescriptions or pessimistic/optimistic predictions about Africa shall be avoided; reforms will take time and have to be adjusted to the local context (power structures) general political economy disorder is not inevitable or irreversible but a response to contradictory and contingent demands imposed on particular regimes that can be changed through appropriate policies and external support. 8 Analytical Narratives of Development Failure and Success Why do some countries 'de-develop'? Why do others succeed? Can the successes be replicated?

Diamond (The Spirit of Democracy: The Struggle to Build Free Societies Throughout the World)

2008. What drives democracy? Internal Factors: All regimes depend on some mix of legitimacy and force; Authoritarian divisions; Economic development External Factors: Diffusion and demonstration effects; Peaceful pressure: diplomacy, the conditioning of aid, and sanctions; Democratization by force: ex. From Haiti 1994, 1st Security Council Vote of its kind; Regional Influences 14 Democratization, Authoritarian Resilience and Regime Change Why do authoritarian regimes at times democratize, liberalize, collapse, or stabilize? Do limited governance and institutional reforms tend to strengthen or weaken them? What role, if any, does development/culture/society play?

Brett (Market Societies, Open Systems and Institutional Pluralism)

2009. Adversarial conflicts over state versus market led theory are now giving way to attempts to understand better ways of constructing symbiotic relationships based on organisational pluralism and diversity. The first assumption is that market based systems enable individuals to achieve their goals by entering into voluntary exchanges with others. However, under certain circumstances where markets fail a need for alternative hierarchical or solidaristic institutions comes up. 3 Designing Effective Management Systems: Incentives, Authority & Accountability Why should we use different kinds of organisations to solve different kinds of problems?

Brett (Politics, Bureaucracy and Hierarchy in Public Management Systems in Reconstructing Development)

2009. Benefits of NPM:Private agencies pursue own limited objectives & choose own management systems. Provides for balance between state and privatization - managerial efficiencies dependent on state regulation and support. Competition. Results and performance based systems designed to reduce costs and strengthen incentives. Critiques of NPM: Quasi markets not so helpful for delivery of merit goods. Might be hard to identify suppliers thus this mechanism only works where they already exist; risk of monopoly. Bigger risk of politicized decision making e.g. absence of uniform salary structures...Increases authority of politicians over bureaucrats - ignores possibility of abuse of power - naïve belief in public interest motivations and assumes good intentions of administrators. Assumes politicians and administrators can make reliable judgements about quality of official performance - no reliable baseline information. 6 Old and New Forms of Public Administration Are there really better ways of providing services to poor people than old style bureaucracy?

Brett (Reconstructing Development Theory chs. 9, 11, 12)

2009. Classic theories view development as a transition from traditional to capitalism or socialism. Now it is about pluralistic institutions. The liberal model does not work/not adopted everywhere. The characteristics of development based on Western model and Washington Consensus presuppose existence of appropriate conditions and capital for these institutions to succeed. But it is not the case so interventions fail. Development is a long term process of managed institutional change involving shifts from oppressive institutional arrangements to open systems based on free markets and rational scientific experimentation. Institutional change will fail when new rules clash with old prevalent ones and when tools for removing dysfunctional elements not available or cannot be used. All societies will follow different route to modernity. Values and knowledge systems that govern traditional institutions are based on actual conditions in local areas, not abstract principles. Development is about the potential of hybrids, these hybrids will be successful depending on their design. - Disorders that emerges from liberalism is a defensive reaction to an incomplete transition to modern institutions and failure to provide people the resources they need to live by these new rules. 18 Community Based Organisation and Informal Service Delivery Systems Should development practitioners make more use of informal service delivery systems than they often do?

Stokes (Political Clientelism)

2009. Clientelism is the proffering of material goods in return for electoral support and efforts to secure other's support of the patron. Clientelism tends to be prevalent in societies where there is widespread poverty and where there are weak and ineffective state apparatus. The basic idea behind political clientelism is that rather than using public policies to effect transfers from one class of voters to others, parties could deliver inducements to individual voters and thus bolster the parties' electoral prospects. It was a tactical redistribution. Clientelism is a repeated game. Clientelism leads to slow economic development and spoils democracy by discouraging governments from providing public goods and creating an interest in the ongoing poverty and dependency of constituent, and allows dictators to hold onto power for longer by filling voters with fear of retaliation if they fail to do as asked or proposed to them. 13 Democracy, Authoritarianism, and Development What accountability mechanisms exist in democratic contexts and in authoritarian contexts, who do they serve, and what are their advantages and limitations? How do these affect development in various types of democratic and authoritarian regimes?

Brett (Reconstructing development theory: State Regulation, Democratic Politics and Accountable Governance)

2009. Liberal states need to perform a set of functions: to guarantee property rights and enforce contracts; regulate access to common property resources; manage externalities; and provide public goods and welfare services. The state must force individuals to obey its laws, but also should be accountable to them if it is not to abuse its power. In a democratic process, state economy relationships influence the options available to governments, at global and local levels. Liberal states do this by designing institutions that subject citizens and rulers to the rule of law, make them accountable through democratic markets, and oblige them to respect the autonomy of private producers and their own officials. ? 2 Institutional Differentiation, Accountability and Development Management Can we prove that some institutions are more developed than others?

North, Wallis & Weingast (Violence and social orders: a conceptual framework for interpreting recorded human history)

2009. Two steps from natural state to open access: 1. Develop institutional arrangements that enable elites to create possibility of impersonal intra-elite relationships 2. Dominant coalition find in the interest of elites to expand impersonal exchange Doorstep conditions must be met: institutional and organizational support for increased impersonal exchange, as well as institutions being consistent with logic of natural state 2 Institutional Differentiation, Accountability and Development Management Can we prove that some institutions are more developed than others?

North, Wallis & Weingast (Violence and Social Orders)

2009. What leads from authoritarian regimes to open access social orders? Democratization and liberalization go together. Doorstep Conditions 1. The establishment of rule of law among elites 2. The adoption of perpetually existing organizations 3. Political control of the military The Transition Proper Economic and political openness - by creating open access in these areas, the space becomes less of a space for rent-seeking. 14 Democratization, Authoritarian Resilience and Regime Change Why do authoritarian regimes at times democratize, liberalize, collapse, or stabilize? Do limited governance and institutional reforms tend to strengthen or weaken them? What role, if any, does development/culture/society play?

Bardhan (Awakening Giants: Feet of Clay)

2010. China grew faster than India which might lead people to believe that an authoritarian regime would be better but the rising inequality in China questions this conclusion and the rising middle class in China might soon demand a more open and democratic society. Democracy puzzle in India: democracy has been a success and has reached more and more people so why have the poor people who are so assertive when election times comes often not punished politicians who are ineffective in resolving the endemic problems of poverty, disease, and illiteracy? Even though endemic poverty isn't punished by the voters, certain variables that have concentrated effects are. Inflation, especially, is not tolerated by anyone given the low incomes of most people. This is problematic in India. Decentralization of governance is supposed to increase democratic accountability but this is not always the case. It is also supposed to improve service delivery but not always the case. Governance reforms of decentralization in India remain ineffective. China decentralization more successful especially in providing incentives for rural industrialization. Yet it has increased regional inequalities. 13 Democracy, Authoritarianism, and Development What accountability mechanisms exist in democratic contexts and in authoritarian contexts, who do they serve, and what are their advantages and limitations? How do these affect development in various types of democratic and authoritarian regimes?

Howell & Lind (Theorising the securitization of aid and effects on civil societies)

2010. This chapter places the evolution of NGOs in a historical context, looking at the links between development, security and civil society from 1970s to 2000s. NGOs were brought into development projects as tools of neoliberal policy, civil society organisations became instrumentalised and depoliticised. Only the right type (liberal) of NGOs is recognised. This chapter shows how NGOs gradually became powerful development actors. The End of CW and related polarisation led to a new approach to aid: tripartite paradigm (3 key agents of development: state, civil society and market, viewed as partners). By 2000: the critique of the liberal assumption that development and security were positively related emerged with the recognition that development agencies can unwittingly contribute to conflict and violence, even if unwittingly (SAPs). Alongside this, there was a growing concern about the accountability and legitimacy of NGO actors, in the context of the debates on aid effectiveness. 16 NGOs' Accountability, Legitimacy and Representation International non-governmental organisations must become more accountable if they are to retain their influence and position of trust?

Banerjee & Duflo (Poor Economics)

2011. Incremental marginal changes can lead to positive outcomes. Countries should address issues one at a time rather than focus on the big questions. Need to understand the effect of local institutions rather than of INSTITUTIONS. Successful interventions consider the incentives and motivations of the stakeholders. Good politics do not inherently lead to good policies. Policies have to be well‐designed: demand driven, taking into consideration the context, and the programs have to be straightforward with clear and concrete tasks. Community driven development projects can fail due to local elite capture or ethnic divide. Argues that Easterly focuses more on improving the structure of politics rather than on specific policies (institutionalist view). 4 Aid Architecture, Donor Interventions, and Accountability What does aid (usually) achieve? Why? What would a pro-development, incentive-compatible aid regime look like?

Banerjee & Duflo (Poor Economics: Reluctant Entrepreneurs)

2011. The businesses of the poor have high marginal return (increase in net by increasing investment by one unit), low overall returns. "Everywhere we have asked, the most common dream of the poor is that their children become government workers."A good job is a steady, well-paid job, a job that allows a person the mental space needed to do all those things the middle class does well." 10 Emerging Firms: SMEs, the Informal Sector, and Social Enterprise Is the informal sector a problem or an opportunity? What should be done for or to it?

Faguet (Decentralisation and popular democracy: governance from below in Bolivia)

2012. Effects of decentralisation in Bolivia: higher responsiveness of local governments' investment decisions to local needs in terms of: education (illiteracy rates and high rates of nonschooling are linked to public investment, that became more need-oriented), agriculture (more adequately targeted investment, reflected in child malnutrition), water and sanitation (high responsiveness of local gov't in '03'07: more standpipes), health (initially local gov'ts weren't reacting, later needs taken into account), urban development (infrastructure improved) transport increased investment of municipalities (>90%); learning effects from simpler sectors in terms of organisation and coordination of investment applied to more complicated issues Why are some local governments more responsive and accountable than others? Examine dynamic context: Micropolitical factors (political will, representativeness of policies) local politics are nourished by diverse, heterogeneous local economy with an active society, political competition and this will in turn lead to more responsive, accountable local government. yet if dominant, single firm has strong interest in wellbeing of collectivity, then political competition isn't necessary to ensure responsiveness and integration of local interests. 7 Shaping a Responsive State: Democracy, Decentralisation and Effective Governance Has decentralization's potential to improve government responsiveness, effectiveness and efficiency been greatly exaggerated?

Acemoglu & Robinson (Why Nations Fail)

2012. Nations fail when they have extractive economic institutions supported by extractive political institutions that impeded and even block economic growth. Critical junctures, contingency 1 Geography, Values, Factor Endowments, and Institutions Why are some countries rich and others poor?

Brett (Managing Pro-Poor Development in Weak States- The Politics of Donor-Recipient Relationships)

2014. Analyzes the trajectory of aid in LDCs. Argument: some countries have benefited while others haven't and this is due to incentives, state capacity, etc. Moreover, he analyses PEA (Political Economy Analysis) and recommends how it could be used to improve the results of aid. Successful aid outcomes occur when there are strong donor and recipient states, compatible interests, accountability mechanisms, and efficient organizational capacity to implement the projects. Aid failures happen when there are incompatible goals and interests, asymmetrical power relationships, perverse incentives, and transaction costs. Weak and poor states are the ones that need aid the most yet are the least able to effectively use it. 4 Aid Architecture, Donor Interventions, and Accountability What does aid (usually) achieve? Why? What would a pro-development, incentive-compatible aid regime look like?

Birney (Decentralization and veiled corruption under China's "rule of mandates")

2014. China has a governing system in which it is inherently difficult to even identify corruption. Fiscally decentralized but politically centralized. Rule of Mandates. Depending on circumstances, an identical activity could be interpreted as mandate-abiding or as a form of corruption. Why don't economic development targets not incentivize more anticorruption? (Corruption might threaten development - a high priority mandate). Solutions harder to implement under rule of mandates: limiting the discretion given to local officials and enlisting the public in actively overseeing local officials. Public does not generally know the mandates that local officials are given. If they are told they might object to the priorities. 15 Anti-Corruption and Rule of Law Why do some places have more rule of law than others? Why do some places have less corruption than others? When do anti-corruption and rule of law reforms succeed?

Faguet (Decentralisation and Governance)

2014. Decentralisation affects governance by making the government more accountable and responsive to people and their needs: What are the aims of decentralisation? reconstitution of government coordination and organisation from hierarchical topdown mechanism to local self-government, inclusion of citizens in decisionmaking and provision of more democratic policymaking. What are arguments in favour of decentralisation? Theoretically, it could improve accountability and responsiveness by altering its structure so as to increase, citizens' voice and change deep incentives that public officials face, reduce power abuse by transferring government functions/resources to lower levels, improve political stability by giving aggrieved minorities control over subnational governments with limited power over issues that affect them, directly increase political competition by creating many smaller arenas that politics vie to control. 7 Shaping a Responsive State: Democracy, Decentralisation and Effective Governance Has decentralization's potential to improve government responsiveness, effectiveness and efficiency been greatly exaggerated?

Evans and Heller (Human Development, State transformation and the Politics of the Developmental State)

2015. Article explores notion of developmental state, provides justification through case studies emphasizing how this is enabled through a transformational role enriched by an independent civil society. Thus state must play developmental role while enabling and tapping into crucial of civil society - without which, any national development project will fail e.g. India, South Africa cases. "Promoting capabilities in the contemporary global capitalist economy requires broad-based embeddedness. In its optimal form, such embeddedness implies three things: links to a plurality of groups; multiple points of contact with the state that reduce the costs of transaction between state and society; and modes of intermediation that promote co-production and coordination over domination, coercion, or dependency." "Representative institutions by themselves cannot ensure that the state's engagement with society produces developmental outcomes...as the case of India underscores, even in a highly consolidated and extremely competitive electoral system, representative mechanisms can still fail to ensure a government's accountability to its citizens...can favor the logic of clientelism." "South Africa stands as a cautionary tale. Because of the anti-apartheid struggle, democratic South Africa inherited a vibrant and organized civil society, one in which rights-based discourses were powerful and subordinate groups enjoyed significant capacity for collective action. South Africa might very well have traveled the same path as Brazil, except that the dominant party status of the ANC has more or less insulated the state from subordinate civil society...[ignoring HIV-AIDS pandemic, policy drift favoring capital over capability]" "...politics are primary. Technocratic and organizational capacities are still fundamental to the success of the developmental state, but absent a complementary politics of encompassing engagement with a broad cross-section of society, technocratic capcity is sterile and ineffectual." 12 States and Markets in Development: State-Directed Approaches What roles do states and markets have in economic transition in state-directed approaches?

Brownlee, Masoud & Reynolds (The Arab Spring: Pathways of Repression and Reform)

2015. What explains why democracy seems to only have taken root in Tunisia? 1. Strong states to channel political competition into formal democratic institutions rather than toward the battlefield. 2. Sufficient degree of pluralism within the pro-democratic forces preventing losers in one election from concluding that their chances of acquiring power are better under dictatorship. Achievements of Arab Spring were sadly modest: 14 non-democratic Arab countries, 6 brought down autocrats (Tunisia, Egypt, Libya, Syria, Yemen, Bahrain), 4 unseated dictators and initiated democratic transitions (Libya, Tunisia, Egypt, Yemen), 2 could be said that they completed their transitions by producing elected governments with de facto authority over their territories (Tunisia, Egypt). "Instead, the cases of regime breakdown and democratic transition in the Arab Spring direct our attentions to the ways in which developmental processes shape the resources available to oppositionists—both for compelling breakdowns in authoritarian regimes, and for competing with each other in the post-breakdown period. Industrialization generates new, class-based mass actors who can match older, religious-based ones. Increases in urbanization (and state capacity) mean that universal linkages based on class and citizenship supersede local ties based on sect, clan, and other ascriptive identities that fragment populations in the face of incumbents (Alexander 2010: 21; Arjomand 1988: 71-73; Richards and Waterbury 1998: 154-156; Charrad 2001:4). Thus, we argue that it was the structure of political competition, rather than the alleged deficits of Arab voters, that constituted the link between development processes and democratic outcomes." Quiescence was the norm for most Arab polities because regimes drew on structurally determined reserves of loyalty and repressive capacity to beat back challengers or prevent them from emerging. Most resilient regimes possessed oil wealth (cement ruling coalitions, bribe populations). Arab Spring not "a fundamental change in the dynamics of the region's politics, but... a reminder of the importance of inherited structures in determining the durability of autocrats and the prospects for democratic government. The uprisings may have opened a new chapter of contentious politics in the Arab world, but did not efface the social and economic structures impeding democratic development." 14 Democratization, Authoritarian Resilience and Regime Change Why do authoritarian regimes at times democratize, liberalize, collapse, or stabilize? Do limited governance and institutional reforms tend to strengthen or weaken them? What role, if any, does development/culture/society play?

Olson (Dictatorship, Democracy and Development)

Argument in favour of monarchy is based on the idea that if someone owns a country he has incentives to keep it prospering. Argues that society can only work if it has a peaceful order and other public goods. Violence and insecurity do not work since no one has incentives to produce goods. There are gains from providing security and other basic public goods and these gains can leave everyone better off, including a dictator. When comparing democracy and autocracy, argues that in a democracy the competition to buy votes would not generate as much distortion of incentives as those generates by the rational dictator through taxation. The optimal tax rate for democracy is lower than that of an autocrat. However, democracies do not necessarily redistribute less (to themselves as in to the elected party or leader) than dictators who distribute the surplus to themselves. Democratic redistribution can be shared quite unequally by the citizens. Wrong to assume that all people living underneath an autocrat want to overthrow him. Again collective action problems as well as fear that stationary bandit will be replaced by roving one. Hence special circumstances lead to democratic transitions: o You can have triumphant democracies encouraging or subsidizing o You can have internal and spontaneous transitions when an individual transitions to democracy in other countries like in Germany and Japan. or a group cannot establish an autocracy even if they would win from it. Autocracy is prevented and democracy permitted by the accidents of history that leaves a balance of power or a stalemate which is a dispersion of force and resources that makes it impossible for any one leader or group to overthrow all others. The next best option for a small group who wants power is power sharing. Example: US and UK. 13 Democracy, Authoritarianism, and Development What accountability mechanisms exist in democratic contexts and in authoritarian contexts, who do they serve, and what are their advantages and limitations? How do these affect development in various types of democratic and authoritarian regimes?

Jacques (In Praise of Hierarchy)

Argument: managerial hierarchy is the most efficient, hardiest and natural structure for large organizations. Properly structured, it can release energy and creativity, rationalize productivity and improve morale Practical problems of hierarchy + needs of entrepreneurs call for a new organization that suits the Information Age (flat, semi-autonomous groups) Inadequate understanding and utilization of managerial hierarchy problem is not to find an alternative, but to make the system work efficiently 9 Hierarchy, Co-Operation and Devolution in Capitalist Firms Is 'top-down management' and private profit more effective than participation and cooperation in running private sector firms?

Bowles & Gintis (Is the demand for workplace democracy redundant in a liberal democracy?)

Criticism that "the project of democratizing the workplace is redundant given that worker autonomy is already secured by the competitive structure of labour markets and the liberal democratic structure of the state" is based on false reasoning employment relationship involves an exercise of power, based on democratic values Argument for democratic governance in firms isn't based on enhanced efficiency democratic firms offer a reasonable opportunity for those who wish to work in a democratic environment Evidence shows that in suitable institutional settings, democratic firms have positive effects on productivity implies the elimination or significant reduction of their limitations (e.g. credit market disadvantages from concentration of wealth) "We thus conclude that a standard argument for democratic governance - that it is a defence against the abuse of otherwise unaccountable power - applies to the employment relationship. A second argument for democratic governance - another which we think is no less applicable to the firm than to the state - is that majority rule and associated procedures yield on average better decisions than those made by a single individual...A third argument, originally suggested by John Stuart Mill, is that democratic governance is a school for the formation of democratic citizens capable of collective self-rule...A final argument... is that democratic accountability of the state is essential to assuring the equal dignity of citizens...If our first argument... is accepted, this fourth argument clearly applies to the governance of the firm..." 9 Hierarchy, Co-Operation and Devolution in Capitalist Firms Is 'top-down management' and private profit more effective than participation and cooperation in running private sector firms?

Semler (Managing Without Managers)

Experience of Semco in Brazil: success story of unorthodox management 3 fundamental values on which they base management programs: o Democracy: participation gives people control of their work o Profit sharing: gives them a reason to do it better o Information: tells them what's working and what isn't 9 Hierarchy, Co-Operation and Devolution in Capitalist Firms Is 'top-down management' and private profit more effective than participation and cooperation in running private sector firms?

Faguet Lecture (Is 'top-down management' and private profit more effective than participation and cooperation in running private sector firms?)

Fact: systematic difference in firm structures (across sectors and countries) o Due to tradition, habit, culture o Other aspects are there for good reason: Creativity and innovation flatness Capital stock Smaller orgs tend to be flatter and more participative Startups: small, familiar structure Partnerships: law, advertisement, management consultant firms Human capital can walk out the door very difficult to replace (competition, client-base) Large companies: more hierarchical Due to processes and sector o Capital: machines, technologies (hardware, software) Strategy for new-comers: o Copy + adapt Base on lessons learned and best practices of high level competition take advantage of low-cost knowledge Adapt Learning and incorporating existing technology (IT or OI) into your company with low institutional development and low HC takes time and is hard o 1st stage: need for command and control Strategy for companies on the frontier: o Shift it technological change o With change in organizational structure: more participatory + flatter 9 Hierarchy, Co-Operation and Devolution in Capitalist Firms Is 'top-down management' and private profit more effective than participation and cooperation in running private sector firms?

Roberts (The modern firm: organizational design for performance and growth - The Nature and Purpose of the Firm)

Firm = a central common party to a set of bilateral contracts facilitates efficient organization of the joint inputs in team production Team production requires an assessment of marginal productivities to ensure efficiency Non separability of inputs raises costs of measuring individual performance Monitoring performance to match marginal productivities to costs of inputs and to reduce shirking can be achieved more economically in a firm (vs. across market bilateral negotiation amongst individuals) Contractual structure = means of enhancing efficient organization of team production + detecting shirking (implies reduced detection costs + economic discipline of employees) Firm = privately owned market 9 Hierarchy, Co-Operation and Devolution in Capitalist Firms Is 'top-down management' and private profit more effective than participation and cooperation in running private sector firms?

Shami (Collective Action, Clientelism and Connectivity)

In the presence of state failure, community based projects can offer direct benefits being an alternative avenue for citizens to provide and obtain goods and services needed to improve their well being especially for the poor and it also offers indirect benefits by building trust and cooperation in a community so as to facilitate future community based activities. A major caveat to the "second wave" of collective action studies, however, is that collective action often breaks down under hierarchical social relationships... , the article finds that clientelist relationships do not, in and by themselves, block peasant collective action. Rather, it is the interaction between clientelism and isolation that empowers patrons to block community-based projects. Peasants in connected villages face no such constraints, but instead rely on their patrons' assistance in collective projects, making the hierarchical network an additional resource. Author focuses on this argument: connectivity can lower peasants' dependence on their patron by breaking his monopoly in the village economy and thereby the ability to block peasants' decision to engage in collective action. The patron who faces loss of clients instead of blocking collective action may even assist peasants in such activities. The motivation to assist the client is the desire to maintain the integrity of the hierarchical network and thus their level of control. There is an emancipatory effect of connectivity in asymmetric power relations (not unique to patron client relationship). It provides exit options for the poor enabling them to enjoy greater control over their lives. Articles focuses on isolation as a limiting factor and reducing isolation has three effects: o Connectivity breaks the monopoly power of the patron resulting in a reduction in peasants' dependency on his resources. o Increase in outside options reduces the level of competition between peasants for the patron's resources. o The increase in peasants' access to exit options limits the patron's ability to impose sanctions on peasants. This improves the cohesiveness 18 Community Based Organisation and Informal Service Delivery Systems Should development practitioners make more use of informal service delivery systems than they often do?

Krishna (Active Social Capital: Tracing the Roots of Development and Democracy)

o Differences in village performance due to social capital + agency capacity o Villages with high social capital have greater propensity for mutually beneficial outcomes o Differences in performance among villages was mainly due to how effective village collective action, but it doesn't translate to collective achievement --> Need for incentives, direction and strategies for success Differences in performance among villages was mainly due to how effective village Social capital leaders (agents) were more so than the stock of social capital. o Parties are not efficient in mobilizing social capital, agents fill in this gap (this demonstrates how informal institutions can sometimes work as a better alternative in LDCs than formal ones) o Agents provide access and information to villagers about market and state, they are well informed about the options available and help villagers to mobilize their stock of social capital within their environment and constraints o The rise of villagers has occurred due to increases in educational attainment, mass media, local governments increased intervention in rural development programs, and intensified 2 party competition (since agents do favors for the villagers for favors, which in many ways translate into votes) o Village leaders have different comparative advantages for different social domains (economic development, communal peace, which are the traditional Village Council, etc.) Proponents of social capital argue that performance is shaped by the propensity for mutually beneficial collective action --> bottom up o Structuralists believe that it's shaped by the incentives and disincentives created by formal institutions (state and market) --> top-down o Argument: incentives and propensities must be connected for obtaining best results and middle level institutions are necessary to make such connections Middle level institutions: parties, unions, interest groups, trade associations, agents 17 Collective Action, Public Goods, and Common Resources Is community based development a viable alternative to an under-providing state? Or is the collective action problem inevitable?