International Politics: Leftist Governments in Latin America PDF

Topics in International Politics Week 1 & 2 LEFTISTS GOVERNMENTS IN LATIN AMERICA Introduction Unprecedented wave of electoral victories by leftist presidential candidates in Latin America. The wave be...

Topics in International Politics Week 1 & 2 LEFTISTS GOVERNMENTS IN LATIN AMERICA Introduction Unprecedented wave of electoral victories by leftist presidential candidates in Latin America. The wave began Pour when in 1998, Alst Hugo Chávez was elected president of Venezuela, and has continued until today with ups and downs (Argentina, Bolivia, Brazil, Chile, Ecuador, El Salvador, Nicaragua, Paraguay, Uruguay --- since 2018 México, Panamá, Costa Rica, Honduras, Peru, Colombia). The breadth of the “left turn” is unprecedented in the region in terms of the number of left-leaning governments and leftist alternatives that emerged or strengthened in countries where they did not govern. The “left turn” changed not only who governed but also how they governed. US style capitalist democracy was hegemonic in the region in the 1990s. But by the late 1990s, the neoliberal consensus (‘Washington Consensus’) had begun to unravel. Trade liberalization - Deregulation - Privatization - Financial liberalization - Debt-crisis management The free-market model applied in the region was successful in controlling inflation, but it was beset by anemic growth, periodical financial crises, and deepening social and economic inequalities. Opportunities for the mobilization of the opposition. Heterogenous experience Institutionalized leftist parties maintained the relatively orthodox macroeconomic policies and liberal Pour Alst democratic constitutions they had inherited from no leftist predecessors. Chile, Brazil, and Uruguay. Statist and redistributive project that brakes sharply with the ‘Washington Consensus’. Venezuela. Cases that fall in between these two poles: Argentina, Bolivia, Ecuador, Nicaragua, and Paraguay → combine different types of policy and regime orientations. What’s “Left” in Latin America? Historically the “left” associated with an alternative model to capitalism (emphasizing public ownership of the means of production and central planning) and it was also based on the idea that differences among the different groups were mainly strategic: revolution / democratic path to socialism. However, the crisis of Marxism (beginning of the 20s) redefined the concept. Now, it was based on the reduction of social and economic inequalities. Left parties tend to use public authority to redistribute wealth and income to lower-income groups, erode social hierarchies… In the socioeconomic arena, left parties want to combat inequalities, enhance opportunities for the poor, and provide social protection. In the political realm, the left seeks to enhance political participation and erode hierarchical forms of domination that marginalize popular sectors. It is also based on the idea that inequalities are rooted not only in social classes, but also in gender, race, or ethnicity. Populism and the Left They are analytically distinct phenomena that may overlap but often exist in tension with each other. Populism is an elastic and contested concept. It has been used to define actors, ideologies, government programs, and regimes. Topics in International Politics Week 1 & 2 Populism is related to patterns of political mobilization → “Top- down political mobilization of mass constituencies by personalistic leaders who challenge established political or economic elites on behalf of an ill- defined pueblo” (Levtisky and Roberts). The programmatic content of populism has varied considerably across cases and over time. Classic populism” (1930s-1960s): Nationalism, state-led- development model (Import substitution industrialization - ISI), redistributive and social welfare measures. Neo-populism (1990s); Neoliberal economic policies, economic stability and/or physical security. Leftist leaders who subordinate partisan intermediaries to appeal directly to mass constituencies and the ones who challenge prerogatives of capital and redistribute income towards the poor, may be considered populists (Hugo Chávez), however, leftist leaders who emerge from and remain accountable to autonomous social movements, and also that are no redistributive are not. Explanations for the “Left Turn” (1st PINK TIDE) First of all, it is important to know that it was called the 1 st pink tide because the pink color is got by diluting the red (no communism, which are the reds). It is caused by multiple factors, some of which are long-term and structural, while others are short-term and contingent. The relative weight of the different factors shifted over time. Long term factors that facilitated the “left turn.” Inequality – In 2002, 221 million Latin Americans (44% of the regional population) lived in poverty. As the country had a lot of poor people and the left wanted to created measures to combat this situation, then, the poor classes voted the left. Institutionalization of electoral competition – After the transition to democracy in Latin America the left parties could openly organize and compete for power (except for Cuba). It was a response to the economic crisis in the 90s. Fall of the Soviet Union → Era of Human rights, democratic nations with the Rome Statute (not signed by the US). The US put low interests’ rates and they shifted the focus into the middle east because of the 11s (the war against terrorism). Initial wave of leftist victories because of: Neoliberalism (market-oriented reforms of the 1980s and the 1990s). Economic crisis (1998-2002) (negative per capita growth, poverty and unemployment rate increased throughout the region). The extension of the wave has been possible thanks to: The post-2002 commodities boom (high growth). Current-account surpluses and increased revenue flows reduced governments dependence on the US and international financial institutions, thus avoiding fiscal and foreign exchange crisis and provided resources to invest in social welfare policies. Regional diffusion or demonstration effects. The political succès of Chávez, Lagos, Lula… helped to break down the belief that leftist governments could not maintain economic stability, avoid regime breakdowns, and even gain reelection. Typologies of left governments “Two lefts” → “Radical/wrong” left: Personalistic leadership, statist economic policies, autocratic rule. Pour Alst left: Institutionalized, market-oriented, and democratic. “Moderate/right” Parties’ organizational characteristics. Two dimensions: Topics in International Politics Week 1 & 2 I) level of institutionalization II) the locus of political authority. Established party organization New political movement Institutionalized partisan Left. Movement Left (MAS in Bolivia) Electoral professional left (PSCh in Dispersed Chile; PT in Brazil). authority Mass-organic left (Broad Front in Uruguay) Populist machine (Peronism under Kirchner, Populist Left (Chavez in Venezuela, Concentrated FSLN in Nicaragua) Correa in Ecuador) authority Established party organization: Support networks, and identities are longstanding, these parties have been competing in elections since well before the onset of the left turn. New parties/movements: Recent creating, were formed as electoral vehicles for leaders or popular movements that arose to challenge the political establishment during the crises of the late 1990s and the 20s. Concentrated authority: Concentrate power in the hands of a dominant person, are autocratic and it directs popular mobilization from above. Dispersed authority: Disperse power more broadly within party organization or social movement networks. It holds leaders accountable to the broader interests of parties or movements and allows popular mobilization to occur from below. Electoral professional left: Controlled by cadres with established careers in the business of politics and expertise in the management of electoral campaigns, legislative procedures, and policymaking processes. Characterized by an erosion of local branches and a deactivation of the party membership. Open to adaptation to the competitive demands of the electoral marketplace. Mass-organic left: Strong local branches, active grassroot membership, close ties to labor unions and other organized social constituencies. Embedded in social networks as they penetrate and organize civil society. The electoral campaigns are labor-intensive affairs with mobilization of grassroots partisan and social networks. Populist machine: institutionalized parties + concentrated power in the hands of a dominant person. Tend to be institutionalized via patronage linkages; patronage links popular constituencies to local and regional party structures, preserving centralized and personalistic leadership. Are flexible and pragmatic in their polity orientations. They move between the left and the right depending on the policy preferences of the party leadership and the social, economic, and political contexts. Movement left : new political force that displaces traditional party organizations. Its leadership is directly spawned by popular movements organized outside the electoral arena. Populist left: concentrated authority. Opponents to established parties who capitalize on widespread disillusionment with the traditional political class. It is important to highlight here that while the 1st pink tide was starting, two groups were created depending on different situations: first of all, there were countries like Chile that had previous experiences with leftism, they were very similar to social democratic parties of Europe, and the ones who didn’t have previous experiences liked for example Bolivia, Ecuador, or Venezuela. The left in power Economic policies Orthodox Statist policies Heterodox o Strict fiscal and monetary o Systematic expansion of o Mix of orthodox and discipline, as well as state control over statist measures. Topics in International Politics Week 1 & 2 central bank economic activity. o Selective forms of state independence. o Private property or intervention that o Economic stability and competitive markets challenge orthodox low inflation. subordinated to principles without o Private ownership of nationalist and/ or abandoning the market- productive sectors and redistributive goals. led model or making the let markets determine o Growth / popular state the primary engine wages, prices, and labor consumption: increase of of development. relations. public spending and o Open trade and foreign relaxation of monetary investment regimes with policy; expansion of state low tariffs and quotas, regulation of private competitive exchange economic activity; state rates and few restrictions controls on trade, foreign on the movement of investment, and capital capital in or out the flows. country. Brazil, Chile, Uruguay and Peru Venezuela Argentina, Bolivia, and Ecuador Social policy (redistributive social policies). o Increased expenditure: This increased expenditures on existing targeted programs (Lula in Brazil with Bolsa Familia) ; thanks to that there was also a creation of new targeted social programs (Misiones launched by Chávez). o Extension of the coverage of existing social programs: larger percentage of the population would access to the benefits (pensions, health insurance…) and the incorporation of vulnerable groups to this program (women, domestic workers…) o Labor market policies (minimum wage, collective bargaining, public employment programs, workers’ rights) o Property rights (in some countries such as Bolivia and Venezuela measures to redistribute assets and wealth – land reform) Foreign policy (creation of new organizations in the region / moderate and radical policies – depending on topics, countries, time period), ex: MERCOSUR. Combination of economic and social policy All the left governments used state power to alter the distribution of income and economic opportunities in their societies, for this reason, none of them is neoliberal, indeed, the combination of macroeconomic orthodoxy and redistributive social policies by a government could be called “social liberalism” (Brazil, Chile, Uruguay). Thus, this leaves us with 3 policy orientations in LATAM: Statism (Venezuela), Heterodoxy (Argentina, Bolivia, Ecuador), and social liberalism. Is also important to know that although the majority of LATAM countries didn´t pose a lot of importance to other examples, they had the perfect one VERY close to them: Uruguay. It was and is the perfect country to live; they legalize abortion, same-sex marriage, and recreational marijuana. It was like the « paradise » comparing to what it was seen in other countries. Thanks to this first wave, certain accomplishments need to be highlighted: Improvement of education → Lower rates of criminality. More democratic participation: Some governments manipulated the poor classes to vote them, giving them different subsidies, knowing that those classes depend on the state to keep growing. These rights cannot be eliminated easily in the future. More women in power: o Kristina Fernandez in Argentina: Same-sex marriage law, gender-identity law, gay rights… Topics in International Politics Week 1 & 2 o Rousseff in Brazil: Investigated the abuses by the military, appointed women in 3 of the most important cabinet positions… o Bachelet in Chile: Ministry of Gender Equality, legalized abortion, environmental issues… Massive reduction of poverty and the efforts of the governments in redistributing wealth (Bolsa Familia by Lula). Thanks to this wave, LATAM is the epicenter of left-wing politics in the Global-South while committed to the idea that the deliberate state action powered by the popular will is critical to correcting injustice and alleviating human suffering. The left and democracy Historically, the left’s relationship with democracy in Latin America has been marked by considerable tension. After the end of dictatorship, there was an reconciliation with democracy. Democracy provided a set of institutional safeguards to protect human rights and manage the conflicts intrinsic to political pluralism. Also provided space for the left to mobilize popular constituencies for social and economic reforms; however, it is true that this reconciliation was never completed; thus, two main ideas raised that then, gave rise to 3 conceptions about democracy: “respect for liberal democratic norms and procedures” and “the promotion of popular participation in the political process”: Liberal democratic : combination of a liberal political ideology that operates under an indirect democratic form of government. Fully respect electoral procedures and civil liberties, limiting popular mobilization to the electoral arena. Radical democratic : concerned with a radical extension of equality and freedom, following the idea that democracy is an unfinished, inclusive, continuous and reflexive process. Respects institutionalized pluralism but also wants to construct new channels for popular participation and support for relatively autonomous mobilization of social groups outside the electoral arena. Plebiscitarian orientation: vote by the people of an entire country or district to decide on some issue, such as choice of a ruler or government, option for independence or annexation by another power, or a question of national policy. The decline of the Latin America Left Right-wing turn? Pour Alst Conservative forces took control of South American leading economies [(Argentina (2015), Brazil (2016; 2018), Chile (2018)]. Paraguay (2018), Colombia (2018), Uruguay (2019), Dominican Republic (2020). The 1st wave started to have problems, most of them of corruption (“Nuns and guns” in Argentina), however, another problem, and one of the firsts of them, was that the left rose in a very positive economic situation in LATAM, mainly thanks to the commodity boom, nevertheless, when this boom passed, then, the LATAM countries started to experience high economic downturns, which was not beneficial for the leftist parties. Left-wing parties started to be in fatigue, and right-wing parties took advantage of the situation to resurge slowly, aiming to reverse the shift in power from the power brokers that have historically controller Latin America toward those sectors of society that have been marginalized (women, the poor, sexual minorities…) Topics in International Politics Week 1 & 2 Second Pink Tide? A new “Pink Tide”? In the last five years leftist candidates have won the vast majority of national elections and now govern all of the region major countries/economies but Brazil Costa Rica (2018), Mexico (2019), Panama (2019), Argentina (2019), Bolivia (2020), Peru (2021), Honduras (2021), Chile (2021), Nicaragua (2021), Colombia (2022), October 2022 → Will Lula win in Brazil? The countries that participate in this second pink tide: OLD ONES → Authoritarian COME BACK → More moderate NEW ONES Venezuela and Nicaragua Argentina (Alberto Fernández, Colombia (Gustavo Petro9; México moderate Peronism); Chile (Borik, (López Obrador, drugs, cartels…); coalition with the moderates); Perú Brazil (Lula, people didn’t want Bolsonaro); Bolivia (Evo Morales, Coup D’état, Luis Arce) Gustavo Petro´s inauguration as Colombia´s first left-wing president confirms this “new pink tide”; however, this one’s comes a little bit different than the previous one: The first pink tide enjoyed a commodity boom because of the US interest rate reduction, that created an ideal macroeconomic environment. The leaders started to be popular because of their increased public spending, so they won reelection. By contrast, today´s leaders face a storm: rising US interest rates, geopolitical instability, and limited fiscal space after a PANDEMIC. They only came with bad news, which doesn’t benefit the approval of the people. Polarization has worsened the sky-high approval ratings of the leaders, now are very difficult to achieve. The 1st wave supported regional integration and regional summitry, however, today, leftist parties tend to not prioritize ties with neighbors (Brazil-China). The 2nd wave seems greener than the first one (environmental protections…). Some of the new leaders focus on LGTBQ rights and race issues, are mainly progressive, which is something that in the first wave we could not see, because they were ultraconservative. All of these characteristics provide evidence of the assumption that the second pink tide is going to be short lived and more turbulent than the first one, because of a far more hostile environment and because its leaders diverge a lot in a bunch of issues. The pendulum swings left to right and now left again. o Anger by politicians. o Economic recession (aggravated by the effects of the pandemic + the war in Ukraine) o Inequality. o Importance of the voters located in the center of the political spectrum. The case of Mexico: Victory of Manuel Lopez Obrador (2018) Campaign o Appeal to ordinary people o Contempt for elites and critical media Topics in International Politics Week 1 & 2 o Economic and social problems → discontent o Political system riddle with corruption, chronic poverty, and inequality, rising violence. o (Demilitarization) fight against organized crime Policies o Orthodox socioeconomic policies combined with statist measures. o New Trade Deal with US and Canada (U.S.-Mexico-Canada Agreement, 2019) o “Battle against corruption” Concluding comments The Latin American Left is very diverse (socioeconomic policies; democratic governance). Pour Alst Explanations / ability to govern: o Leaders (voluntaristic interpretations) o Contextual factors that shape the policy and governing choices of left governments ▪ Political economy approach (resources and policy making autonomy available to left governments) ▪ Institutional approach (strategic opportunities and constraints created by party systems) Paths to power o “institutional” (Brazil, Chile, and Uruguay; populist machine, Argentina) o “Crisis-outsider” (Bolivia, Ecuador, and Venezuela) Legacies of the Left in Power Criticisms by some sectors → Failure to create an alternative to neoliberalism and counteract imperialism. But... o The Left can govern well (“moderate left”, Chile, Brazil, and Uruguay) o Moderate success on the social front (Reduction in poverty and income inequality - Social inclusion) o Transformation of political representation and competition in the region Challenges for the Left o Governing vs Grass Roots o Citizenship Rights o Governing without Prosperity Topics in International Politics Week 3 THE ARABIC SPRING The Arab Spring / The Arab Uprisings Democratization A series of pro-democratic protests and uprisings that took place in the Middle East and North Africa. Protests PourinAlst started 2010 in Tunisia after Mohammad Bouazizi’s self-immolation and extended after to Egypt, Bahrain, Yemen, Libya, and Syria. There were also demonstrations in Morocco, Algeria, and other Arab countries; in each country, there were different responses by political regimes (accommodation, repression, abdication, civil war, etc.). In such a tense situation in the countries, massive uprisings and protests started demanding a fundamental political change (bread, freedom, and social justice). But what is the real explanation of why this uprising started? (Period of contentious politics, wide range of conflictual arena, Charles Tilly). Because: Sequence, timing, and pace of events: Matter a lot, one country could not start the uprisings without the example of another country. The main drivers of the protests were domestic groups, all started inside the countries. Importance of regional and extra regional factors: structural variables (the distribution of power, the institutional environment, norms, and identities); process variables (imitation and diffusion, transnational networking) New technologies and social networks. New and constantly growing social movements (youth and women, undergraduate…) These uprisings are distinguished in three phases: Mobilization: Popular contention exploded across the majority of Arab countries nearly simultaneously. There are a lot of factors that explain this massive mobilization, the ongoing mobilizations during the transition, the different approaches to former regime officials and institutions, accommodations to the military and entrenched elites, and the role of regional and international actors. Regime´s responses: From accommodation to repression, abdication to civil war… The decisions made by the militaries have played an important role. Political outcomes: The outcomes will be highly heterogenous with some regimes shifting toward more democracy and others sustaining an autocratic status quo. There was also a rejection of dictatorships because of a lack of freedom, increasing inequalities (corruption and nepotism) and inflation and high unemployment (young people with no prospects). Some governments offered limited political concessions, however, others combined repression with lavish public spending, others responded to the uprisings with brutal force; countries were basically different one from another (in the median age of the population, the urbanization level, balance of power, geostrategic situation…)- , moreover, they were also moved by their own interests: few options for military action in Syria, Saudi oil make it unlikely that any US president could oppose it on a matter defined as existential… The responses of the governments give us the assertion that the institutions of authoritarian rule had not lost their relevance. The speed and magnitude of mobilization across multiple countries The mobilization didn’t come out of nowhere. For most of the decade of the 2000s, popular protests characterized Arab politics, however, the mobilization of 2011 was different: It was massive; incorporating different sectors of the society that haven’t previously joined protests. It was surprising: “Out of nowhere.” Fast. Topics in International Politics Week 3 Often driven by new protest actors (youth, urban middle classes…). An important role has the youth in these protests, because they become a novel category for political analysis, there are also digital natives which is very important. It had a regional nature; the protests erupted simultaneously. De-ideologization. Heterogeneity. As more people were joining the protests, more people with higher thresholds were joining to them; and, at some point, societal incentives shifted into a cascade dynamic of people flipping to a social safe position (protest). However, this cascade model captures in a very imperfect way the dynamics of the uprisings. It was not only a revelation of thresholds, but it was a transformation of underlying preferences for and beliefs about the moral legitimacy of regimes. The protests were also different across countries; in some countries, protests built and grew, and in others they petered out, in some cases protests turn to violence and in others were nonviolent… and there were also two important countries insulated from the protests (Iraq and Lebanon). It is also important to talk about internal and external mobilization: Internal mobilization: Very high social mobilization because of “popular revolutionary processes” (Tunisia, Libya, Yemen, Egypt). In many cases, parties or political movements joined the social mobilization. External mobilization: Initially weak, after USA and EU called for Mubarak to resign (Egypt) o Greater international involvement (NATO in Libya) o No military intervention in Syria (Russia and China vetoed a UN Security Council resolution) o Gulf Cooperation countries with support from the US and the EU asked the President of Yemen to step down but Gulf countries sent security forces to Bahrain to help with the suppression of protests. o In other Arab countries, international pressure translated into rhetorical expressions of support for the changes made / promise. Political outcomes As yet, only Tunisia has made success of a true revolution, and even that remains uncertain, other states, as Egypt or Syria had experienced a genuine political transformation. Michael McFaul´s → “It was situations of unequal distributions of power which produced the quickest and most stable transitions from communist rule, in countries with asymmetrical balances of power it was the ideological orientation of the most powerful party that determined the type of regime to emerge”. He argues that continuous mobilization is something positive to produce democratic outcomes, because it gives balance of power. Democratization / Waves of Democratization Democratizations Studies (Brumberg, 2014) Pour Alst Culture / structure debate: Modernization theory (grand social and political structures) versus culturalist analysis (local / national symbols, values, and traditions) Marxist scholars (theories of dependency) Topics in International Politics Week 3 Transitions paradigm: Structure / agency (leaders) Balance of power / pacts. Patterns of socio-economic divisions / class conflict. Post-transition studies: Dynamics of undemocratic regimes (formal / informal aspects) Structural factors. More attention is paid to identity conflicts (national, ethnic, or religious) → importance of institutional factors → how the regime structures identity conflicts. Waves of Democratizations “A wave of democratization is a group of transitions from nondemocratic to democratic regimes that occur within a specified period of time and that significantly outnumber transitions in the opposite direction during that period of time” (S. Huntington 1991). Three waves of democratization: The first wave of democratization 1828-1926: 40 democracies and only a few of them outside the West. o First reverse wave 1922-1942. Second wave 1943-1962. o Second reverse wave 1958-1975. Third wave 1974: Democratization was mainly a Western phenomenon. Demonstration effects have been strongest among countries that were proximate and culturally similar to main actors. Some scholars have criticized Huntington’s periodization: P. Schmitter (1993), four waves (1848-49 / around the First World War (1910-1920) / the Second World War and its aftermath (1943-1948) / the present (1974-)) M. McFaul (2002) Fourth wave: post-communist transitions → their outcomes resulted in both democratic and non-democratic regimes. Main Factors explaining the third wave transitions (S. Huntington) Declining legitimacy. Economic development and economic crisis. Religious changes. New policies of external actors. Demonstration effects or snowballing. Limitations of the approach. Is the Arab Spring a new wave of democratization? During the 90’s processes of political liberalization, change processes of different nature took place in the Arab region since 2011 onwards: Pour Alst Transition to democracy. Political liberalization. New forms of authoritarianism. Cosmetic reforms. Topics in International Politics Week 3 Changes after the protests Authoritarian elites-initiated reforms (Morocco, Algeria, Jordan, Mauritania, Syria, Bahrain, and Oman) Opposition groups initiated the changes (Tunisia, Egypt, and Libya), in some cases with the participation of actors from the “old regime” (Yemen) Political change circa 2013: o Fall of the Presidents in Tunisia, Egypt, Libya, and Yemen. o Changes for the participation of political parties or movements (Morocco, Algeria, Mauritania, Jordan, Syria, Bahrain, and Oman) o Approval or amendment of the Constitution (Egypt, Tunisia, Oman, Morocco, Syria, Mauritania, Jordan, and Bahrain) o “Democratic” elections (presidential, parliamentary, and local government elections) in almost all the countries. o New governments that emerged from elections (Tunisia, Morocco, Egypt, and Libya) Types of change: Transitions to democracy (Tunisia, Libya, and Yemen) Political liberalization (Morocco) New form of authoritarianism after the failure of the democratic transition (Egypt) Small political reforms without significant impact on the political system (Algeria, Oman, Syria, Mauritania, Jordan, and Bahrain) Immobilism? (Saudi Arabia, Qatar, and United Arab Emirates) Democratization 2016 Democracy index – 2021 – The Economist Topics in International Politics Week 3 Why is there no Arab Democracy ? Larry Diamond (2010) / Makdisi (2017) Religion: Pour Alst There are several non-Arab Muslim- majority states rated by Freedom House as near-democracies or democracies. Big “freedom gap” between the Arab and Non-Arab Muslim-majority states: Policies and practices in Indonesia, Senegal, and India: holidays, state funding, cooperation between the state and religion In Tunisia: Growing emphasis on the importance of the Koranic verse that asserts, “There shall not be compulsion in religion / “Civil state” instead of secularism → the Arabic word for secularism carries antireligious overtones. Culture: Ethnic or religious differences → But other countries outside the region also face severe obstacles between them and are democratic (Ghana, India, and South Africa, partly Indonesia) Maybe population in Arab countries simply don’t want to transition into a democracy? This assumption is somehow false, because Arab population (over 80%) thinks that even if democracy is not perfect, is the best system of government, and that having this type of system will be good for a country. Economic level of development: The more well-to-do a country is, the better will prosper in gaining and keeping democracy; by now, many Arab countries are well-to-do. Obviously, there are certain problems, like for example that some of them rank very low in the Human development index, and this is one of the causes for transitioning into a democracy is complicated. However, many actual democracies are about as developed as some Arab countries; so maybe is the economic structure the problem, and not the economic level. Eleven Arab countries are “rentier” states → they depend heavily on oil and gas to keep their states out of difficulty. They derive more than 70% of their export earnings from oil and gas. Most of them don’t need to tax their citizens because they have a lot of cash; this, is clearly a problem: they fail to develop the organic expectations of accountability that emerge when states make citizens pay taxes (“The lower the level of taxation, the less reason for publics to demand representation, no taxation without representation was a political demand, no representation without taxation is a political reality”) Oil states are heavily centralized, they are intensely policed, they have a lot of corruption (“nobody´s money”). The state in those systems is large, centralized, and repressive. The civil society is weak and coopted; and the market economy is severely distorted. Where oil dominates → “Paradox of plenty”, little wealth creation, boom-and-bust cycles, windfall mineral rents to smooth the development of the industry. Oil basically distorts the state, the market. The class structure, and the entire incentive structure. Authoritarian structures and practices: Secret-police and intelligence apparatus: Sophisticated, amply funded and penetrating. Repression is mixed with mechanisms of representation (limited pluralistic elections), consultation, and cooptation. Extreme cases of patrimonialism (sultanism): Domination operates primarily on the basis of discretion” (Libya, Syria, Yemen, Egypt, and Tunisia) Liberalization is cyclical and adaptive: When pressure exists, the regime loosens its constraints and allows more civic activity and a more open electoral arena. Then, the regime returns to more heavy- handed methods of rigging elections, shrinking political space, and arresting the usual suspects. External factors (geopolitics): Unfavorable geopolitical situation. Foreign aid economic resources, security assistance, political legitimacy (US military aid) Conflicts in the region Arab – Israeli conflict → Toxic miasma over Middle Eastern political life. Topics in International Politics Week 3 The Arab League: The Arab states reinforce one another in their authoritarianism and their techniques of monitoring, repression…. Ideology and identify politics (Brumberg, 2014) Importance of institutional / structural dynamics along with local institutional, cultural, or ideologies → autocracies. How autocracies structure identity conflicts → importance of the protection of identity, religious, or ideological groups / “protection racket politics” (Charles Tilly) Network of informal and formal bodies that channel benefits to a great number of constituencies organized in many institutions (parliaments, parties, professional organizations, NGOs, civil society groups, etc. What was different in Tunisia? Tunisia, despite the examples of his neighbors, has managed to overthrow authoritarianism, there are three reasons behind this: The leaders of the Ennahda party argue that democracy was not only acceptable, but it was necessary. “Pacts” between secularists and Islamists before the transition started. There was a kind of inoculation against the intense fear of democracy´s consequences that drives hybrid authoritarianism. The two secular authoritarian Tunisian presidents mobilized fear. Development of political society (organized groups of political activists). They played a vital role in the destruction of the authoritarian regime, however, to construct a democracy, a political society is needed, so secular liberals and Islamists started to create this political society. Transitions to democracy are not easy, we have four important trends in Tunisia: Presidents in the Constituent Assembly affirmed their expectation that they would be able to gather 2/3 majority of the Assembly behind the constitution they were writing. Every major political leader thought that after 8 months of the approval of the constitution election will be held with a fair and free vote. Coalition members and the opposition implied that if Ennahda proved unable to command a party after the elections, he would step down peacefully. The draft constitution had one issue, which was with the powers of the executive. The people should have a role in choosing a president. Four main challenges were faced trying to implement democracy: Ennahda became legal only after the transition had begun. Salafi radicals occupied the US embassy in Tunisia for about 3 hours. Rioters burned the American Cooperative School of Tunisia on the same day; these and other incidents intensified criticism of the Ennahda ministers. The growing crisis intensified with critics of the government. What is going to happen in the future? Three factors that would help the democratic change: The emergence of a single democratic polity in the region (Iraq, for example) Change in the US policy (press for democratic reforms, judicial independence…) Biggest game changer: DECLINE IN OIL PRICES. Concluding comment Revolts burst after years of worsening situation (ravaging governance, economic failure, corruption, Pour etc.) Alst Countries differ in their starting points regarding socioeconomic and political conditions. Rejection of non-democratic regimes Confluence of different factors (social movements and new technologies / social networks) that lead to the uprisings. Topics in International Politics Week 3 It is quite problematic to speak of a democratizing wave in the terms suggested by Huntington. (Only Tunisia became democratic. Due to structural problems and events since 2021, uncertainty about the future of democracy in the country) Arab democracy deficit? It is not so much related to religion or culture. The democratic deficit is more related to political economy and geopolitics – although other factors cannot be ruled out such as identity conflicts. Unrealistic expectations about the uprisings – the so called “Arab Spring.” No democratizing wave → but it occurred a profound transformation of politics in the area (political attitudes, ideologies, political systems, and international relations) Topics in International Politics Week 4 PETRO-STATES Introduction Crude oil is [one of] the topmost traded commodities in the world (coffee, natural gas, gold, wheat, Pour cotton, Alst etc.). Strategic good for many states. Countries that base their development on this resource tend to be among the most economically troubled, the least democratic, and the most prone to conflict in the world. Abundance of natural resources and Petro States. Petro states are particular kind of state whose main source of revenue comes from abroad through sales of oil, which represent at least 40% of total exports and 10% of GDP. These are States that are highly dependent on a resource that is expendable, capital-intensive, strategic, vulnerable to external variables and which can provide a high monopolistic income (Karl). Oil rents (% of GDP) - World Bank. We can put two examples of countries that have huge oil rents but that have performed differently because of that: Norway: Has used the rents of petroleum to perform the highest place of the UN Development Program. Nigeria/Angola: Clustered near the bottom because of the problems that having huge amounts of natural resources has produced. What matters is the type of government and institutions who manages the available oil wealth, for this reason, countries dependent on oil exports seem particularly susceptible to policy failure (weakness of preexisting institutions, authoritarian character…). Petro-states - Key concepts Corruption: Misuse of public power or resources for private gain, generally illegal. Pour Alst Resource curse: Oil is a commodity with several special characteristics: o Natural heritage of a country. o Motor of global industrialization. Topics in International Politics Week 4 o Delectability. o Volatility → Boom-boost cycles. o High capital intensity, technological sophistication. o Enclave nature. o Exceptional generation of profits. ALL OF THEM PRODUCE THE RESOURCE CURSE. Economic Resource Curse: The negative growth and development outcomes associated with certain minerals and petroleum-led development. Political Resource Curse: Resource wealth, petroleum… tends to adversely affect a country’s governance and levels of corruption. Dutch disease: This concept was raised after the negative effects of the North Sea oil boom on industrial production in the Netherlands. Rapid development of one sector of the economy (in particular natural resources) causing real exchange rates to raise and labor and capital to migrate to the booming sector; causing a decline in other sectors and higher costs and reduced competitiveness for domestically produced goods and services, “crowding out” previously productive sectors. Oil windfalls can hurt other economic sectors by pushing up the real exchange rate of a country’s currency (oil exports rise, but at the expense of non-oil exports) Process of deindustrialization that can result from a sudden natural resource windfall. Oil industry → low employment, low levels of technological progress, and low knowledge linkages with other industries, which makes them comparatively unattractive drivers of growth within an economy. Oil price volatility exerts a strong negative effect on: Budgetary discipline, the control of public finances, state planning Investment, income distribution, and poverty alleviation. Oil-led development: Dependence on revenues from the export of petroleum, measured by the ratio of oil and gas to GDP, total exports, and the contribution to central government revenues. Literature covering the period 1970-1990 (Karl Oil) considers that Petro-states have certain characteristics: Slow growth. Barriers to the diversification away from petroleum dependence. Skewed development patterns described by the resource course. Poor social indicators (Child mortality, malnutrition, low life expectancy, high crime and prostitution…) High levels of poverty, inequality, and unemployment: At the beginning of oil exploitation, there is a boom, petroleum revenues transform the society, employment increases, infrastructure is improved… However, the failure to diversify the economic activities creates an obstacle and then, oil exporters see declines in per capita income, creating slowly a situation of poverty. Corruption. Poor governance. Changes in social structure: With oil boom, foreigners become dominant in a country (sometimes they become the social force) because they have those expectations of a better life, this gives less opportunity to domestic workers to develop. This leads to the creation of a new social class, the noveau riche, that characterizes oil states. Middle classes are also vulnerable, because oil generates 3 types of jobs, blurring other ones. Rent: Adam Smith → Rents are earnings in excess of all relevant costs, including the market rate of return of invested assets. Equivalent to monopoly profits. Rentier state: A state that lives from externally generated rents rather than from the surplus production of the population. in oil-exporting states, is measures by the % of natural resource rents in total government revenues. These states generally have economic and political concentration, lines between public and private are blurred, and rent seeking is rampant (Behavior aimed at capturing oil money through unproductive means (grants, subsidies, tariff protection). Where state intervention is high, rent seeking is going to happen (in order to obtain a part of the rent) → POLICY FAILURE. Another characteristic of this state if the loss of fiscal control measuring by overspending and soaring debt and also by the inability of oil states to reform themselves. Topics in International Politics Week 4 Rent seeking: Efforts (legal and illegal) to acquire access/control over opportunities for earning rents. In oil- dependent countries, it refers to widespread behavior (in public and private sectors) aimed at capturing oil money through unproductive means. Economic performance: The economic performance of these States tends to be considered poor. The productive linkages between the oil industry and the rest of the economy tend to be weak. o Employment. o The opportunities for technology diffusion are limited, and so is infrastructure development. Economic growth: In the 1950s and 1960s, scholars believed that natural resources wealth was good for economic growth. At the beginning of the 2000s, it was considered to reduce economic growth (“corruption, weak governance, rent seeking, and plunder). Most studies analyzed the period between 1970 and 1990, when oil- producing states were economically troubled. However, recent studies (Ross 2012) have argued that if we consider a longer period (the last half century), economic growth in the oil states has not been unusually slow but unusually. On average, petroleum has not been strictly an economic curse – even for developing countries: oil did not make states poorer than they would be otherwise. But why were the growth rates of the oil-producing countries average? Inappropriate government policies - Petroleum wealth tends to choke off opportunities for women. Debates Oil and political regimes Pour Alst Point of departure: More oil wealth is associated with less democracy. It somehow impedes the appearance of democracy and makes authoritarian government more likely. The greater a country’s oil income, the less likely it has been a transition to democracy between 1960 and 2008. Different Types of study: cross-national quantitative work and qualitative, theoretically oriented case studies. The greater a country’s oil income, the less likely it has been to transit to democracy. Two broad explanations: 1) Oil can strengthen authoritarian governments and prevent them from transiting to democracy. o Oil wealth prolongs the survival in office of authoritarian rulers (Cuaresma et al. 2010; Andersen & Aslaksen 2013). o Oil helps incumbents remain in office (Omgba 2009). o Oil makes autocracies more autocratic by reducing media freedom and forestalling the emergence of an authoritarian legislative (Ghandi & Przeworski 2007). o Natural resource rents help authoritarian elites/leaders both avoid revolutionary threats and survive them when they occur (Bueno de Mesquita & Smith 2010). 2) Oil can weaken democratic governments and push them toward authoritarianism → mixed results. o Some studies find that oil has prodemocratic effects in democracies, either by making the governments more stable or by improving their democracy scores / “pro- regime stability” (Smith). o Other studies claim that there is no evidence that oil helps stabilize democratic regimes or rulers. o A smaller third group of studies reports that the effect of oil on democratic stability is conditional: it may stabilize democracies that are wealthy and have strong institutions but foster the breakdown of accountability in democratic regimes that are poorer or have weaker institutions. Topics in International Politics Week 4 Between 1960 and 1979, oil states and non-oil states were equally likely to transition to democracy. After 1979, non-oil states were almost three times more likely to make democratic transitions (Ross 2012) this was because most oil-rich developing countries nationalized their petroleum industries in the late 1970s. Timing/authoritarian rule. Inequality levels. We don’t have a defined model that creates a relation between oil and democracy, however, there are certain mechanisms that link oil wealth to less democracy: Rentier effect → “An abundant flow of oil revenues enables incumbents to both reduce taxes and increase patronage and public goods, making it possible for them to buy off a larger set of potential challengers and reduce dissent” (Mahdavy 1970, Crystal 1990, Ross 2001). Group formation effect”/modernization effect” (Friedman 2006) → Try to control the modernization effect in the moment in which you have more and more social mobility, then, there is going to be an emergence of middle sectors (that are going to depend on democracy), and the country want to maintain the stability of the sector. Repression (Ross 2001, Cotet & Tsui 2013). Expending on the military to keep it loyal if an uprising should occur (Wright et al. 2015). Oil might help undemocratic leaders gain the foreign support they need to repel challengers (Rajan 2011). In the moment that there is this oil boom in a country, certain challenges to the claim that oil prolongs autocratic rule emerge: High levels of oil wealth led to more durable authoritarian rule. Equally important → Changes in levels of oil wealth led to changes in levels of democracy. Several studies show that these changes are uncorrelated with subsequent changes in democratic accountability (Short-term effects of oil (changes) Long-term effects (levels)). Causal identification → oil income appears to have no effect on democracy. Oil wealth only became a hindrance to democratic transitions after the expropriation of the 1970s, which enabled developing- country governments to capture the oil rents that were previously captured by foreign-own firms (Andersen & Ross 2014). Some studies show that the net impact of petroleum wealth remains antidemocratic (Herb 2005) but resolving this issue has proven difficult because the impact of oil wealth on incomes is not straightforward. Resource wealth and the quality of institutions Quality of institutions → effectiveness of the government bureaucracy, the incidence of corruption, the rule of law, the state’s capacity to promote economic development. Two bodies of research: The ways that institutional quality may condition the effects of resource wealth on economic growth. → “Voracity effect”: Powerful groups compete for the windfall leading to reduced growth. Mehlum et al. 2006 → Where institutions are “grabber friendly” (propense to corruption) resource wealth tends to lower aggregate income, when they are “producer friendly” (less prone to corruption), it raises aggregate income. Whether natural resource wealth can damage institutions themselves: Different studies find that oil wealth or aggregated measures of resource wealth are inversely correlated with measures of institutional quality. Explanations: o High levels of resource revenues could forestall a state’s capacity to extract taxes from its citizens. o Discourage politicians from investing in the state’s bureaucratic capacity (short-term view); politicians think that the good situation is going to last forever. o Encourage lower-quality candidates to compete for public office. Topics in International Politics Week 4 o Induce politicians to dismantle well-functioning institutions that govern the use of natural resources, in order to gain access to the rents (Venezuela, 2000; Hugo Chávez induced institutional reforms in order to have access to the money, which produced a negative situation) o The volatility of these revenues could shorten a government’s planning horizon and subvert major investments (Karl 1997). o Windfalls could cause a government’s revenues to expand more quickly than its capacity to efficiently manage them. o Conditionality / government ownership: oil leads to weakened state institutions only when the government has a dominant role in the petroleum industry. Criticism: Causation: Corruption / no other indicators of institutional quality. Harmful effects / indirect beneficial ones: Some studies find little evidence that oil has a negative impact on institutional quality (Kennedy & Tiede 2013). The relationship between resource wealth and institutional quality is hard to disentangle → institutional quality is often poorly measured, and institutions could simultaneously affect and be affected by resource wealth. Natural resources and civil war In addition to petroleum, other types of natural resources seem to matter alluvial diamonds and other non-fuel minerals. Important studies at the subnational level (Scholars disagree about the importance of non-fuel resources). Many scholars agree that the effects of resource wealth on civil war resemble an inverted U-shaped relationship: as the value of resource wealth increases, the risk of conflict first rises, then falls. Location of the resource matters (offshore/onshore). Oil is more likely to spark conflict: o When it is found in regions that are poor relative to the national average; populated by marginalized ethnic groups. o When it is located in a region with a highly concentrated ethnic group. o When ethnic minority entrepreneurs use it to promote collective resistance to the central government. Explanations: Natural resource wealth leads to violence by affecting the government – either making it administratively weaker and hence less able to prevent rebellions or increasing the value for capturing the state and therefore inducing new rebellions. [Less evidence in the literature]. Natural resources lead to conflict by affecting rebels, not governments. For example, insurgents from an ethnically marginalized region could be motivated by the prospect of establishing an independent state; local revenues would not be shared with the rest of the country. Interactions between governments and rebels. Resource rents increase the likelihood of conflict due to the inability of the state to facilitate peaceful transactions between groups. Because oil produce high rents, it could be one explanation to go to war (indirectly or directly), for example, the Republic of Congo (1997-1999). Criticism: The cross-national correlation between oil and civil conflict remains contested. Nevertheless, studies that incorporate subnational data on the location of resource deposits consistently show a strong link between oil (and sometimes other minerals) and conflict onsets particularly in low-and middle- income countries. Topics in International Politics Week 4 Concluding comments Scholars tend to argue that the consequences of oil-led development tend to be negative/ natural Pour resource Alst wealth affects economic growth. Petro States show perverse linkages between economic performance, poverty, bad governance, injustice, and conflict → It is due to the structures and incentives that oil dependence creates (Karl). Three major debates on the political effects of resource endowments (Ross): Considerable evidence to support those higher levels of petroleum Resource Wealth and income led to more durable authoritarian rulers and regimes. Democratization Resources and the Quality of More petroleum income increases the likelihood of certain types of Government Institutions government corruption. Moderately high levels of petroleum wealth, and possible other types of resource wealth (for example, diamonds), tend to trigger or Resources and Civil War maintain conflict when they are found in regions dominated by alienated ethnic groups, especially in low-and middle-income countries. Three unsolved puzzles about the resource curse: The scope of the resource effect: Country´s natural resource base might also be affecting other dimensions of political and social life. Mechanisms and conditions that link resources to different outcomes. Policies in the extractive sector. Topics in International Politics Week 5 & 6 LEADERS, INSTITUTIONS AND GROWTH DEVELOPMENT IN SOUTH-EAST & EAST ASIA Introduction Impressive growth rates over the last decades along with notable social gains. Pour Alst identified as developmental states have been successful in achieving remarkable levels of States economic growth alongside widespread increases in the standard of living and broad base legitimacy. Government intervention in the economy. Leaders and Institutions have played a fundamental role in political economy explanations of South- East and East Asia’s growth / development. Concepts and Issues Good governance. Pour Alst Successful provision of institutions that support markets, it includes: Creation, protection, and enforcement of property rights → scope of market transactions. Provision of a regulatory regime that works with the market → promotion of competition. Provision of sound macroeconomic policies → steady environment for market activity. Absence of corruption → goals of policy and legitimacy of the public institutions that sustain markets. Why does good governance matter? Because it produces growth: Poverty reduction. Development results. Excessive regulation undermines economic growth: Poor macroeconomic policy and restrictive trade regimes negatively affect a country’s growth performance. Poor macroeconomic governance (corruption and high inflation) → impact on people with fewer resources/ poor people. Good governance demands policies, institutions, and good accountability. Political Institutions Political institutions help constraint arbitrary exercise of power by politicians and bureaucrats. Property rights. Competition in the political process / accountability of public officials Formal / informal institutions. o Rules and procedures that structure social interaction (Helmke and Levitsky, 2004) o Informal institutions → Unwritten rules and procedures It is important to consider interactions between political institutions. Dimensions of governance Political institutions Pour Alst Political institutions that limit the ability of government to act arbitrarily (fiscal, regulatory, and trade policies) / policy choices. Topics in International Politics Week 5 & 6 Mediate distributive conflicts and have an impact on policy outcomes: Electoral rules. Constitutional rules. Budget procedures. International agreements. Corruption Corruption is the exercise of public power for private gain. Costs for economic development (growth / per capita income) Undermines well-functioning markets. Political institutions can help reduce the opportunities and incentives for corruption. o Decentralization / accountability. o Genuine elections / Electoral rules. o Press freedom and civil society. Institutions of taxation Tax provides the state with resources to build market (supporting institutions) Weak tax collection institutions lead to more reliance on tax revenue from easier sources. Underdeveloped countries tend to have weaker tax administration and higher reliance on tariffs. o Autonomous revenue agencies (tax compliance and tax collection) o Intergovernmental tax and sharing arrangements (to supplement local revenues) East Asia’s pre – 1997 high growth/development Japan + China were a model for the growth of the other countries, then a vicious circle of development of the other East Asian countries started. Pour Alst Average growth rate higher than those of any other region in the world Diverse economic performance of countries but eight economies stand out due to their unusually rapid growth: Japan. Singapore. The Republic of Korea. Thailand. Taiwan. Malaysia. Hong Kong. Indonesia. Shared growth (Campos and Root 1996) Leaders responded to the challenge of coordinating different sectors for economic growth, by collaborating on the design of institutions that spread the benefits of growth-enhancing policies widely, made the reversibility of the policies costly, and gave the individuals and firms confidence that they would share the growth dividend. They also created a sociopolitical environment for conducting sustainable economic growth. This led to this conception of a shared growth that included two themes: the business community was incentivized to build a Topics in International Politics Week 5 & 6 dynamic industrial base and opportunities for the general population were given to benefit from economic expansion (this favored the decrease the risk of the regime failure). Shared growth resulted in support for the regimes, with this, a virtuous circle started: Investment increased, spurring growth and higher real incomes, that reinforced the credibility of the regime, stimulating investment and economic expansion. Leaders in East Asia recognized that they could not grow economically without expanding the economy abroad, as their countries were very poor. Thus, stimulating investment and addressing the concerns of the business economy. To gain cheap credit, firms have to increase their market share in the world economy. Firms could increase their rating only by increasing exports, allowing the private sector to obtain credit on objective criteria. Being allowed to share in the growth surplus induced private business to reveal private information → Regime leadership needed growth to acquire stability → Expropriation of the private sector was reduced. Firms could keep the economic profits while leadership gained the political benefits of rapid growth → LEADERS MUST CONVINCE THE GENERAL POPULATION. Geopolitical environment distinguished by the high risk of insurrection (China, Soviet Union, the Korean War, the war in Vietnam, appeal of socialism) (Some) wealth-sharing mechanisms were designed to incorporate the wider population into the growth process: o Land reform (prosperity of small-and medium – sized farms) o Small-and medium-sized enterprises were given special support. o Seed money from the government funded worker cooperatives. Merit-based civil service recruitment/promotion → national interest → effective implementation of policies. Private investment (plants, equipment, and technology). Key: ability to reward groups → smaller returns in the short run and larger ones over the long term, giving credibility to the regime. Rapid growth (increase real wages and employment), reduced poverty, and improvement of income distribution → Income must be concentrated in the hands of the relatively rich whose marginal propensity to save is high. Labor force shifts from low-productivity sectors to high-productivity sectors, inequality at first increases substantially, decreasing later, however, in East Asia a different trade was seen → Low and declining levels of income inequality. Compared with most other low – and middle-income countries, the high-performing Asian economies allocated more public investment and government effort to developing socio-economic infrastructure in the rural areas. Moreover, East Asian countries on average have grown faster and have a more equal distribution of income than other developing countries. Notable social progress (e.g., improvements in education, health, and housing) Durable economic growth → institutions, rules, and procedures that limited government discretion over economic policy. East Asia’s development model Macroeconomic stability. High rate of saving and investment. Heavy public expenditure on social infrastructure (education) Economic equality: Presence of middle class large enough to support an expanding market for domestic manufactures. Competent technocrats to implement policies. Government intervention / industrial policy. Cooperative arrangements and information sharing among firms and between the private sectors (Japan, South Korea, and Taiwan) Topics in International Politics Week 5 & 6 Export-oriented manufacturing (as the leading sector for domestic economic growth) and importing technology. Prosperity first, rights later? Authoritarian regimes use to extract a huge amount of savings that should be used for social investment (something that is different in democratic regimes, in which they attain needs of the society with savings) Political stability Important is the stability and predictability of the political players. Equally important is also to provide reassurance to potential outside investors and the ability of rulers to remain in power during the necessary shift away from the economically ruinous import substitution policies and other forms of protectionism. Political stability also depends on the strength of the leaders to impose policies that might not initially have wide support. Leaders imposed a single-party dominance (Japan, Taiwan…) and civil rights and freedoms were sacrificed in exchange for basic material well-being. However, it is true that some of these leaders used their power to impose dynastic succession, giving lots of powers to their family, which is totally linked with corruption. Asian values Commitment to hard work. Emphasis on education. Sense of thriftiness. Well-defined family structure (nepotism /dynastic succession) Consensus building. Society above self. Filial piety. Abiding respect for political authority. The majority of this values → Authoritarianism. However, there are several debates around this model: Undergoing transition due to modernization influences. Impediments for an age of interdependence and globalization? There are variations and differences within the region. Positive/negative role? Developmental states. Institutions and growth. o Physical and human capital accumulation. o Institutions and industrial policy. o Business, government relations. Paradigm Departure from traditional neoclassical development strategies: The government intervenes only to correct market failure. “Washington consensus” of US Treasury, IMF, and World Bank → Stable fiscal and monetary policy, low inflation, exploitation of comparative advantage through trade, exchange rate, and foreign investment policies, flexible labor markets, and market-friendly governments. Free market, free trade, free capital mobility, and limited government. Developmental State What is a state? “A human community that (successfully) claims the monopoly of the use of physical Pour force Alst within a given territory” It goes beyond merely government. Weber. Topics in International Politics Week 5 & 6 Experiences of Japan and newly industrializing countries (NICs) – Korea, Taiwan, Hong Kong, and Singapore- from 1960 to 1980s, followed by Thailand, Indonesia, and Malaysia, and, after 1978, China and Vietnam. Place top priority on economic development (growth, productivity, and competitiveness) Actively intervene in the market. Rational and competent bureaucrats: o Lack of consensus in the literature on the key aspects of the routes that states have taken to become developmental. o Developmental outcomes → growth/living standards/legitimacy. “A state which possesses developmental structures (state capacity) and uses these to perform developmental roles” (Routley 2012) What are the developmental outcomes? → National government, elite and popular commitment to a national project/vision focused growth and improvement in living standards. Nationalism serves to mobilise action. o Economic growth. o Increase in living standards (employment industrialization…) o Broad based legitimacy. Elements necessary for the emergence of a developmental state. Key attributes: o A capable, autonomous bureaucracy (but embedded = connected to their societies and particularly their business communities) (Evans 1995) o A political leadership oriented towards development (Fritz and Menocal 2007) o “Political settlements”→ Development agreements or coalitions with segments of the private sector (Haggard 2004). Political settlements are central because with them, elites agree to the rules of the game, the developmental states are build around this kind of political settlements. o A close, often mutually beneficial symbiotic relationship between some state agencies and key industrial capitalists (Johnson 1982) o Successful policy interventions which promote growth (Wade, 1990; Besson, 2004) Historical factors that influenced the emergence of a developmental state: The colonial experience: Two elements of Japanese colonialism (South Korea and Taiwan) are important here: changes to the state structure and institutions; and the pattern of business-government relations. The institutional legacy and the establishment of a capable bureaucracy have been an influence to the state formation. Acemoglu, Johnson and Robinson → Institutions instituted by colonizers had a profound impact on economic development. A number of scholars also emphasize the importance of post decolonization events and decisions. Geo-political context: o Context of the Cold War and the relationship of East Asian states (Japan, Taiwan, and South Korea) with the U.S. The most highly successful developmental states are strategically significant for the US (they received financial and military aid, gained access to American markets for their products…) o Global and regional trends (the Korean war; the Vietnam war; the middle East oil boom, strong yen) (Japan, South Korea, Taiwan). National security threats (external / internal): o Japan emerged from a war and the mobilization towards development is seen to have been a result of the population not being de-mobilize following the war. o Threat of internal unrest (South Korea / Taiwan). In some senses, the developmental state was a strategy of growth that worked to quell internal unrest. o Threats to the nation and government could also provide more volatile fluid situations which offer the opportunity for new coalitions, agreements and political settlements to emerge. Agricultural policies and land reform: o Pro-poor rural policies → Increase of rural incomes and levels of well-being → mass poverty reduction → climate for industrial development (Indonesia, Malaysia, and Vietnam) Topics in International Politics Week 5 & 6 o Land reform (Japan, Korea, and Taiwan) → Economic freedoms to small entrepreneurs and peasant farmers. o Absence of dispossession and land reform are elements of a weakening/removal of agricultural elites. Lessons from the East Asian experience Some limitations of this literature Developmental Pour Alst state is defined in very different ways. Structural explanations have dominated developmental state approaches. Search for causal factors of successful growth at the expense of more historical and contextual analysis. The State is not an internally cohesive and unitary actor. State-society relationship (bureaucrat-constituent links) Problematic premises: o Insulated bureaucrats make rational policies. o Efficient, coherent, and consistent policies. o State policies determine economic performance and outcomes. “Buzzword”: All things to all people. The concept of developmental state could be used differently and with unexpected manners. Impossibility to transfer developmental state model to Africa: o Changed geo-political situation and increased globalization. o Generic problematic nature of the transfer of institutions. o The absence of state capacity and developmental commitment in Africa and elsewhere. Developmental States (Routley 2012) STATES DESCRIPTION ATTRIBUTES REFERENCES Japan, South The Big Three: Japan o Industrial based economy. Johnson 1982; Korea, Taiwan is often seen as the o High economic growth rates. Amsden 1989; 1st developmental o Professional bureaucracy. Wade 1990; Woo- state, both in terms o Autonomous state bureaucracy. Cumings, 1999; of its prior uptake of Chang 2006. developmental state attributes and having been the 1st state to which the label was applied (Johnson 1982). Despite variations between the three, the similarities of South Korea and Taiwan´s strategies to each other and to Japan means that they are often seen to cohere as a group and are often seen as the model developmental states. Malaysia, South Asian o Economic growth more FDI bases Chang 2006; Indonesia, Developmental than the Northeast Asian “Big Doner, Ritchie and States: These states Three”. Slater 2005; Topics in International Politics Week 5 & 6 Thailand and also achieved o Good economic growth rates. Hayashi 2010; Philippines significant economic o Less autonomous bureaucracy than Jomo 2004 growth around the the “Big Three”. same period as the “Big Three”. However, their growth levels were not wuite so high and they were seen to have a less autonomous state bureaucracy and seem by some to have more issues with corruption, although not to have become predatory states. China China´s recent o Good growth rates. Jian-xing and De- impressive o State investment in infrastructure, jin 2010, Howell economic success education, and health. 2006 has led a number of o Sustained economic growth. scholars to see it as having been in line with the developmental state model since the mid-1980s (Evans 2011) Botswana Is frequently held up o Good economic growth rates. as an example of an o Natural resource-based economy. African o Democratic (de facto one-party developmental state) state. What perhaps marks Botswana out more starkly however is the natural resource based economy on which this developmental state has been built. Mauritius, Chile, Social democratic o Reasonable economic growth rates. Costa Rica developmental o Democratic. (Kerala) states: These states o State investment in social protection, are states which health, and education. have achieved a reasonable level of economic growth but have also invested heavily in reducing poverty and social exclusion. They are also democratic and have a fairly open political space. Topics in International Politics Week 5 & 6 Cote d´Ivoire Developmental o Good growth rates. (1960-1975), patrimonialism: o Patrimonialism. Malawi (1964- These states have o Centralized rents. 78), Kenya (1965- been identified as o Developmental outcomes. 75), Tanzania continuing to o Relatively autonomous civil service. (1967-1978), operate in a Rwanda (2000- patrimonial manner 2010) but through centralized rents and a civil service that is to some extent autonomous to have achieved some significant developmental outcomes. The gains obtained during these periods have, however, not been sustained. Ethiopia, South Aspirational o Political actors stating an intention to Africa developmental create a developmental state. states: Key political actors in both South Africa (the ANC) and Ethiopia (the president) have publicly advanced the case for pursuing a developmental state strategy. Whether and how this project will progress is unknown. Institutions and Growth in the East Asia 3 developments redefined the study of Asia´s political economy: rapid growth of new industrialize countries, Pourinvincibility, Japan´s Alst and Japan´s success in key industries. How government interventions contributed to this growth? : 3 debates: The role of big institutions in capital accumulation and growth. The significance of industrial policy. The nature of business-government relations. The role of big institutions in capital accumulation and growth Property rights Property rights I: Strong property rights → Investment → Growth Property rights II: Political stability → Certainty over property rights → Investment → Growth Strong property rights hive incentives to invest, and then, this leads to growth. Topics in International Politics Week 5 & 6 It is also a literature on political instability, which leads to political uncertainty, associated with lower growth and insecurity of property rights. Regime type Regime type I: Authoritarian regime → direct mobilization of resources and pro-investment policies → investment → growth. Growth requires capital accumulation, which demands that resources may be diverted from consumption to investment. Regime type IIa: Authoritarian regime → Stable macroeconomic policy → Investment → Growth. Economic performance depends highly on the macroeconomic policies. Regime type IIb: Authoritarian regime → Policy reforms that improve allocative efficiency → Investment and increased productivity → Growth. In cross section of countries analysis regime type do not seem to matter (Przeworski et al. 2000): Controlling income, regime types have no effect on investment, growth rate or income growth. Dividing the wealth and the poor gives no evidence that regime type affects growth in poor countries. No difference between wealthy dictatorships and wealthy democracies, nature of growth differs. Democracies have slow growth in the capital stock and labor force; but they use labor more productively, pay higher wages and have higher productivity growth. But...why East Asian dictatorships cluster at the high- accumulation, high-growth tail of the authoritarian distribution? Credible commitments Credible commitments I: Representative institutions: Business-government networks and/or counsels limit predation and solve credible commitment problems → Investment → Growth. Credible commitments II: Delegative institutions: Delegation and “Webarian” bureaucracies limit predation, solve credible commitment problems, and improve the quality of policy → Investment → Growth. Two types of institutions: Partially representative’ institutions performed useful functions in some cases for some periods of time. Business – government networks and /or councils limit predatory and the credible commitment problem → investment → growth. Delegative’ institutions: Bureaucratic agencies that are granted broad developmental mandates and insulated in various ways from political interference → improve the quality of policy → investment → growth. o Cross-national evidence of the effects of bureaucracy is scarce because of the difficulty of measuring its quality with any precision. o Tight theoretical and empirical fit between delegation, bureaucratic reform, and economic take off but the ultimate causal connections remain unclear. o Run on meritocratic principles with strong internal systems of rewards (competitive pay and long-term career tracks) and controls (sanctions for corruption). Significance of industrial policy Selective interventions designed to influence the allocation of resources among different activities. Importance of the policies. Influence of institutions on the effectiveness and efficiency of the policies. Four lines of discussion: Topics in International Politics Week 5 & 6 “Big push” models of growth: Coordination problems in the industrial sector in the early stages of growth. Efficient investment can be deterred by small market size and the absence of complementary suppliers for customers. Capital market failures: Government and private institutions (like banks) each play a coordinating function. Hellman, Murdock, Stiglitz → System of financial restraint → Controls on deposit rates and limitations on entry create rents for financial intermediaries, these provides incentives for banks to expand their deposit base contributing to financial deepening. Technology: Different policies and institutions (high-quality education, technology alliances among firms, protection, restrictions on licensing and royalties, government support for research consortium). This is based on the idea that NICs succeeded because of policies of imitation (problems: underinvestment in R and D, coordination problems…) Agglomeration economies: Growth of regions and cities / ‘national’ economies (Krugman 1991) is based on dynamism and growth of particular regions and cities → Urban planning, innovative clusters (Singapour), specialized training… Findings are limited and generally not encouraging for industrial policy advocates, but studies do not take into account all the informal policies or institutional arrangements that could have affected industry performance. Market failures provide a justification for selective intervention − what about the political / institutional requirements that cause / limit government failures? Politicians, bureaucrats, interest groups, and individual firms can bias all of the selective interventions outlined above in inefficient and even resource-destroying ways. East Asia was unique in its ability to limit government failure. Any efforts to replicate that experience in other settings are likely to fail. The safest way to avoid inefficient rent-seeking is to limit the distribution of rents in the first place. It is important to check private rent-seeking. Moreover, consistent industrial policy, can create plausible institutional requirements: Some degree of centralization in the allocation of rents. Appropriate incentives within the bureaucracy. Limits on particularistic business-government networks. The organization of any specific policy effort appear to be highly sensitive to the particular coordination problem at hand. Business – Government relations WHY East Asian states embraced relatively efficient, outward-oriented, growth promoting policies: Ideology: Political elites inherited, develop, or imported ideas about how to achieve economic growth and they have used their control to implement them. International constraints / political elite: Japan, United States, resource constraints, security threats or pressures. Material interests of the government and political elites are in conflict with economic efficiency. State-society relations: Agreements/coalitions with segments of private sector led to rapid growth. There is not a single model of business-government relations: Political institutions diverge in how they provide opportunities for business groups or firms to gain access to, and control over, the policy agenda (elections, corporatist arrangements) The political power of business varied across the region in its organizational coherence, ability to mobilize support from other sections of the population, and capacity to withdraw economic support from the government (Haggard) Topics in International Politics Week 5 & 6 Concluding remarks Political institutions matter and play an important role in economic policy outcomes. Pour Alst governance is fundamental to economic development. Good An effective state facilitates and complements private sector activities and individuals. Broad range of interpretations of the factors that were the most influential in producing developmental states. Important transformations of the states in the area after the crisis of the late nineties of the twentieth century. What lessons can be learnt from the East Asian experience remains highly disputed → (imp)possibility of transferring the developmental state model to Africa and elsewhere? Institutional analysis have been essential for understanding East Asia’s political economy during that particular time period: o East Asian countries solved the problems highlighted by institutionalists – guaranteeing property rights, making credible commitments, pursuing efficient policy making, and limiting rent-seeking and corruption - in very different ways. o A variety of institutional settings can contribute to high growth. There is not a single ‘model’ of East Asia’s growth: variety of ways of solving institutional problems. New analyzes have to shed light of the institutional arrangements that explain political relations that create and support them. Topics in International Politics Week 7 & 8 CHINA & INDIA Introduction Asian strategy: exporting labor-intensive, low-priced manufactured goods to the West. Pour Alst China is the world’s largest economy (on a purchasing power parity (PPP) basis), manufacturer, merchandise trader, and holder of foreign exchange reserves: Investment-driven, export-oriented. High growth rates in the last decades. Real annual GDP growth averaging 6.7% in the period 2015- 2019. Hundreds of millions of people have been lifted out of poverty. India’s ‘economic successes. One of the fastest-growing economies on the planet Consumption-driven model Real annual GDP growth averaging 6.7% between 2015 and 2019. The gains for the rich and the middle classes have been tremendous, those for the poor little. The political environments under which economic reforms were initiated and implemented were quite different: o China has a non-democratic regime (one party regime) o India is a multiparty democracy. Debates: o China model was more appealing than liberal democracy. o India growth → inequality, nationalism, and democracy. World Bank: China : economic development since 1949 The birth of reform, 1978-89 Pour In the lateAlst 1970s, few people though that China was going to be such a successful country, it was poor, isolated and unstable. Decades of radicalism of Mao left destabilized state and society. During the Cultural Revolution (1966-76), bureaucratic and legal institutions collapsed, intellectual were sent to hard labor, the elite fell… The rise of power of Xiaoping in 1978 marked a dramatic shift in the country. He stabilized elite politics and used a low-key management style marked by a search of consensus among leaders. Party governance was regularized, and mass movements faded, there was a stress on ideology. Moreover, he promoted a merit- based system. The rest of Chinese bureaucracy was backed to institutionalized governance as well. Economically, prior to 1978, China had a centrally planned economy, and it was relatively isolated from the global economy in general with an average annual real GDP growth of 4,4% from 1953 to 1978, the 1980s saw Topics in International Politics