On the Worldwide Bureaucracy Indicators Database

Pamela Jakiela over at CGD has a great post on the quality and composition of bureaucracies across the world. Like Jakiela, I was struck by this finding:

Across all countries in the WWBI data set, there is a huge amount of variation in the share of public employment concentrated in rural areas. However, rural public employment is very highly correlated with rural private employment—almost all the date points in the figure above are centered around the 45-degree line. One interpretation is that governments’ apparent urban biases may just reflect the concentration of economic activity in urban centers—and not any inherent desire to target government benefits toward urbanites. Or perhaps urban bias is a thing of the past. In any case, it is conspicuously absent from the WWBI data.Screen Shot 2018-12-06 at 10.18.31 AM

Makes you wonder whether urban bias has always been a Zambian Copperbelt thing with little traction elsewhere.

More broadly, I am happy that the Bank appears to be caring more about government and not just governance.

Bureaucratic capacity is a critical component of government and stateness. Based on my experience so far studying the political economy of development, if I had to pick a factor that is absolutely fundamental for the realization of long-run economic development it would be stateness.

If you think about it, a lot of the low-hanging fruits in development that could get many countries to lower middle income status and beyond — for example, agricultural productivity, petty manufacturing, rationalized construction sectors, healthcare, education, and water and sanitation — require a modicum of political stability, security, and mere copying and pasting of policy ideas from elsewhere (with sensitivity to local conditions and with some scope for experimentation).

Strong states can do this. Weak states cannot.

There is no way around the basics: Development will take time

I just read Chris Blattman’s response to the UK Prime Minister’s op-ed in the Journal. It reminded me of a lot of the things that I have been reading lately in preparation for my fieldwork (My dissertation will tackle the subject of legislative (under)development in Africa, with a focus on the Kenyan and Zambian legislatures).

Cameron’s sentiments in the op-ed are emblematic of the problems of development assistance. Like in all kinds of foreign intervention, developed states often try to externalize their institutions (and more generally, ways of doing things). These attempts often ignore the lived realities of the countries being assisted.

Forgetting the history of his own country (think autocratic monarchs, monopolies, limited suffrage), Cameron thinks that democracy, human rights and free markets (all great things) will magically create jobs in the developing states of the world. They don’t. In fact, they often lag the job creation process. For development assistance to be effective it must eschew these feel-good approaches to the problem of underdevelopment.

Blattman is spot on on a number of points:

  1. Unchecked leaders are bad for economic development (this is why I am so much into PARLIAMENTS!!!): Also, democracy is NOT synonymous with limited government. Heads of state like Queen Victoria or Hu Jintao or Bismarck or even Seretse Khama were in no measure democrats. However, they ruled under systems with strong (sometimes extra-constitutional) checks to their power. That made a difference.
  2. Institutions rule, yes, but the right kinds of institutions: 1688 moments do not drop out of the sky. They are often preceded by decades if not centuries of civil strife, economic change and plain old learning. Institutional development takes time. Plus each society requires its own unique and appropriate mix of institutional arrangements to meet unique economic and social needs. A procrustean approach to institutional development (embodied in global capacity building) will inevitably fail. Institutional development must never be allowed to be captured by those who think that we can transform Chad simply by having them adopt Swedish institutions.
  3. Growth will require creation of jobs, i.e. industrial development: The poor countries of the world need real jobs for high school-leavers and other less educated people. The present focus on the “sexy” entrepreneurial sectors – whether they are small businesses for the poor or tech hubs for the very highly educated – as the engines for growth in the developing world is misguided. I reiterate, starting a business is a very risky venture that should be left to the wealthy and the occasional dare devil. The poor in the global south need stable 9-5 jobs. Lots of them.

And lastly, where do strong institutions come from? There is no easy answer to this question. What we know is:

  1. History matters: Present countries with a long history of stateness have a better track record of building strong institutions for development. Yes, they may not always be democratic, but countries with a long history of centralized rule have strong states (and institutions) that deliver for their people (for more on this see Englebert and Gennaioli and Rainer).
  2. Democracy does not always create strong institutions: Since 1945 many have chosen to forget the fact that universal suffrage is a pretty recent phenomenon in the political history of the world. For the longest time world polities were ruled by power barons who held de facto power (as opposed to the procedural de jure power in democracies). When democracy came along after the Enlightenment the resulting structures of rule often reflected these de facto configurations of power. Over time institutions in these countries were cemented enough to allow for complete outsiders like say the current president of the United States to be elected without upsetting the balance of power (in another era he would have had to have mounted a coup). This is the challenge of the democratization in the new post-WWII states. How do you make democracy serve the interests of the people, rather that purely that of the elite? How do you use democracy to create strong institutions? Is this even possible? And if not, what other options do we have?