« Governance in Turmoil. The Political Economy of an Endogenous Process » (2008)

« Governance in Turmoil. The Political Economy of an Endogenous Process » J. Ould Aoudia and N. Meisel (2008)

Today, we are experiencing the end of absolute global domination by a handful of European countries and their North American descendants.
For the first time in 400 years, these countries are seeing the world escape their hegemony with the emergence of new and powerful actors and the already palpable effects of this emergence on the other developing countries. This is the end of the post-colonial era that contrasted a developed core with a developing periphery. This movement is massive in terms of its repercussions on the new ways of functioning in the world.
And its full scale has yet to be seen.
How do the Northern countries perceive the emergence of these new actors? The analytical tools developed and promoted by the developed countries and the multilateral and bilateral agencies have so far accounted for neither the economic rise of certain developing countries in Asia nor the barriers to growth that hinder the vast majority of the other developing countries. The East Asian economies that have taken off in the last 50 years have developed and applied strategies that differ from the standard analytic framework of liberalisation and “good governance”.
In the meantime, the countries that have conformed the most to this framework – especially in Latin America, Africa and the Arab world – have remained trapped in low, halting growth rates. This has put the effects of 50 years of prescriptions and projected aid out to the “developing countries” largely into question.
Yet is the most important factor in the rise of the Asian countries the content of the policies implemented or the fact that these policies have been developed, discussed and weighed up within the societies themselves? Four centuries of Western hegemony have probably made this kind of question a blind spot in the Western understanding of the
world. This is borne out by the current “blind rush” to prescribe economic liberalisation and then “good governance”, it is now the turn of democracy to be projected onto the rest of the world.
Firstly, it should be noted that, in today’s world of globalised information the Southern countries now view these prescriptions in terms of the difference between words and deeds. Gone are the days when a Batavian merchant, an active supporter of one of the world’s most open and democratic societies in Amsterdam, could coolly order the
enslavement of peoples in Indonesia and the deportation of Chinese workers in atrocious conditions. Today, the sermonising on economic liberalisation, “good governance” and democracy is too often blatantly contradicted by the commercial, financial and political practices of the Northern and Southern elites to be totally credible.
Secondly, this battery of prescriptions from the West disregards the experiences of the countries that have wrenched themselves free from underdevelopment. These experiences could be briefly summed up as a combination of strategic vision drawing on a collective imagination, economic diversification into new income-generating activities with growing returns, and a political organisation guaranteeing the convergence of the elite and society’s interests around the attainment of a “common good”. The societies in question, of which Singapore is possibly the most consummate model, have therefore been able to advance at their own speed towards a rule of law (efficient and uncorrupt administration and justice system, protected property rights, etc.) without this progress necessarily including democracy.
In the relationship between politics and economy in the development process, what really matters is the legitimacy of the leaders rather than compliance with the formal rules of democracy, and particularly the holding of elections, which is increasingly used as an indicator of democratic functioning. Although developed countries regard the
legitimacy of leaders as broadly equivalent to compliance with the electoral rules, it is not based on the same mechanisms in hierarchical societies where defence of the nation, achievement of national ambitions and shared economic successes can unite the people around their leaders. The democratic governance discussed in this book is based on the recognition of the necessarily endogenous nature of development processes, which itself stems from the eminently political nature of human government. Yet there are ambiguities in this attitude, which bears
the marks of the prescriptive approaches of the past. The command to be free, to take charge of yourself and make your own decisions is nevertheless still an order.

This paper looks at how the question of institutions has been introduced into the field of development policies and economics, to provide a more detailed analysis of economic development in its close relationship with forms of political organisation. It finds that the institutional transition, which includes governance, only prompts
economic and political development if it is based on a process endogenous to the societies. This process does not rule out borrowings from the outside, but borrowings that are recontextualised and reappropriated by the societies: although the institutions cannot be exported, they can be imported. So where does all this leave development
Development economics rediscovers institutions. The first factor in the renewed interest in institutions is the repeated failure of growth models to satisfactorily account for economic development successes and failures worldwide. Growth accounting may well identify the contributions of the traditional factors (physical,
financial, human and labour capital), but it is unable to clearly explain a “residual” that often accounts for over half of the growth in gross domestic product (GDP).

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