The Politics of Inclusive Development It is now widely accepted that politics plays a significant role in shaping the possibilities for inclusive development. However, the specific ways in which this happens across different types and forms of development, and in dif- ferent contexts, remains poorly understood. This collection provides a state- of-the-art review regarding what is currently known about the politics of inclusive development. Leading academics offer systematic reviews of how politics shapes development across multiple dimensions, including through growth, natural resource governance, poverty reduction, service delivery, social protection, justice systems, the empowerment of marginalised groups, and the role of both traditional and non-traditional donors. The volume not only provides a comprehensive update but also a ground-breaking range of new directions for thinking and acting around these issues. The book’s orig- inality thus derives not only from the wide scope of its case-study material, but also from the new conceptual approaches it offers for thinking about the politics of inclusive development, and the innovative and practical sugges- tions for donors, policy makers, and practitioners that flow from this. 1 The Politics of Inclusive Development Interrogating the Evidence Edited by Sam Hickey, Kunal Sen, and Badru Bukenya 1 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © The various contributors 2015 The moral rights of the authors have been asserted Some rights reserved. 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Enquiries concerning reproduction outside the scope of this licence should be sent to the Rights Department, Oxford University Press, at the address above Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Cataloging in Publication Data Data available ISBN 978–0–19–872256–4 (Hbk.) ISBN 978–0–19–878882–9 (Pbk.) Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work. First Edition published 2015 First published in paperback 2016 This book is dedicated both to the future of our latest arrivals, Noah Jem, Shawn Michael, and Matthew Francis, and in memory of the late Adrian Leftwich, a greatly valued colleague and friend. vii Foreword The Effective States and Inclusive Development (ESID) Research Centre strives to create knowledge that contributes to making states more effec- tive and committed to achieving social justice. This is a grand goal but our partnership of academic and research institutes—across Africa, Asia, Europe, and North America—works at local, national, and international levels to deepen the understanding of governance in the developing world in ways that impact on policies and practices so that peoples’ lives and livelihood are improved. Our partnership is multinational, multidisciplinary—and exam- ines development from a multidimensional perspective! This book is ESID’s first major academic collection and draws on a large num- bers of studies that partners have provided (see <http://www.effective-states. org> for full details). Its title— The Politics of Inclusive Development —would have appeared an oxymoron to earlier generations of those engaged in the policy and planning of development. For many involved in development when it was focused on foreign aid, ‘politics’ was a catch-all term for the pro- cesses that stopped detailed technical plans (and the theories underpinning them) from achieving their stated goals. It was always a negative force: the idea of ‘politics’ delivering growth or human development was risible. But, times have moved on. The pretence, and futility, of the assumption that ‘development’ occurred in some rarefied, apolitical context has been laid to rest as growing numbers of studies have demonstrated that ‘politics matters’, indeed ‘institutions matter’. For those of us who spent our early careers at the grassroots level in devel- opment practice the initial findings of these erudite studies has not been a surprise: we had always known that our operational work was embedded in political processes that might block achievement but could, when condi- tions were supportive, facilitate economic and social advancement. What we needed was advice and guidance about what could be done to make political contexts more responsive to inclusive development (usually labelled as ‘rural development’ in those dim and distant days). The research in this book rep- resents a significant step in making the understanding of development more politically savvy by developing the theoretical apparatus and knowledge base to support better-informed development policy and practice. Foreword viii This book provides: 1. a detailed and original theoretical framework that shapes ESID’s work and, we hope, that of other researchers; 2. a systematic review of the evidence about the politics of ‘what works’ in achieving inclusive development; 3. a set of clear and concise propositions about how to advance such knowledge in a policy relevant fashion. Its editors—Sam Hickey, Kunal Sen, and Badru Bukenya—are to be congrat- ulated for succeeding in editing a volume that is both grounded in the clas- sic tomes of social science theory and highly topical. Over the last ten to fifteen years the context for development has changed profoundly and that change continues at a phenomenal rate. The geography of wealth is shifting east to Asia. Sub-Saharan Africa, long viewed through a lens of Afro-pessimism, is tipped for investors as a future growth pole. The majority of the world’s extremely poor people now live in countries classi- fied as middle-income. Connectivity grows at unprecedented rates, raising the prospects for improved transparency of public and private actors—per- haps, even improved accountability. And, with the rise of remittances and new sources of development finance, traditional foreign aid increasingly seems like a minor factor in the development arena. But, not all is good news. Two particular issues stand out. First, economic inequality is reaching unimaginable levels, with Oxfam reporting that the world’s eighty-five wealthiest people own the same as the three billion poor- est. Economic power and political influence are increasingly concentrated in the hands of small numbers of supranational mega-billionaires far removed from contact with the day-to-day problems and opportunities of the major- ity. Just as alarming, it is clear that the global capitalist system that produces and distributes wealth is environmentally unsustainable. The system that has underpinned economic growth and human development will have to be trans- formed if future generations are to have a chance of experiencing a ‘good life’. In such a context, the theoretical contribution of this book is of particu- lar significance, as it moves the focus from statics and equilibria to change and dynamics. It takes us beyond the ‘new’ new institutional economics of growth to understanding how dynamic political settlements shape pat- terns of accumulation, social provisioning, and social recognition as they impact on state capacity and elite commitment (or lack of commitment) to development. Building on the work of Douglass North, Daron Acemoglu, James Robinson, and Mushtaq Khan, the book’s analytical framework inte- grates critical additional elements: the role of ideas (alongside incentives); the possibility of popular agency; the influence of transnational factors; Foreword ix the opportunity for emerging coalitions to promote inclusive development; and the dynamics of political regime change in growth processes. Beneath this framework lies the constant interplay of politics and power relations, as those with power seek to maintain the status quo and new actors and emerg- ing coalitions seek change. While this book is a scholarly output, it identifies implications for policy and practice (for ESID outputs targeted on policy audiences, see the Briefing Papers on our website). The universal prescriptions of the original new insti- tutionalism—democracy, decentralization, strengthening the demand side, and so on—are shown to be double-edged: they may weaken rather than strengthen development outcomes. While the volume critiques ‘one size fits all’, it does not shift to the other extreme—‘context is everything’! It identifies a typology of political conditions that, in the future, will seek to generate type-specific findings to stand alongside case-specific conclusions. Whether these findings will be able to overcome ‘the barriers’ that political analysis faces in aid agencies remains a question for future analysis. As CEO of ESID, I want to wholeheartedly thank the book’s editors, con- tributors, and all those who have contributed to its production (ESID and BWPI’s excellent support staff, scores of reviewers, research assistants, and partners on four continents) for their efforts. I hope you enjoy reading it— even more, I hope it contributes to deepening your understanding of the politics of inclusive development. David Hulme This document is an output from a project funded by the UK Aid from UK Government for the benefit of developing countries. However, the views expressed and information contained in it are not necessarily those of or endorsed by the UK Government, which can accept no responsibility for such views or information or for any reliance placed on them. xi Contents List of Figures xiii List of Tables xiv List of Abbreviations xv List of Contributors xviii Part I. Introduction 1. Exploring the Politics of Inclusive Development: Towards a New Conceptual Approach 3 Sam Hickey, Kunal Sen, and Badru Bukenya Part II. The Politics of Accumulation and Growth 2. The Political Determinants of Economic Growth: An Analytical Review 35 Kunal Sen 3. The Politics of What Works for the Poor in Public Expenditure and Taxation 60 Paul Mosley 4. Governing Natural Resources for Inclusive Development 86 Anthony Bebbington Part III. The Politics of Social and Legal Citizenship: Promoting and Protecting the Rights of the Poor? 5. The Politics of What Works in Service Delivery 119 Claire Mcloughlin 6. Political Factors in the Growth of Social Assistance 146 Armando Barrientos and Sony Pellissery 7. The Politics—and Process—of Rule of Law Systems in Developmental States 174 Deval Desai and Michael Woolcock Contents xii Part IV. The Politics of Recognition 8. The Gendered Politics of Securing Inclusive Development 197 Sohela Nazneen and Simeen Mahmud 9. Ethnicity, State Capacity, and Development: Reconsidering Causal Connections 231 Prerna Singh and Matthias vom Hau Part V. The Transnational Politics of Development 10. The Politics of Aid Revisited: A Review of Evidence on State Capacity and Elite Commitment 259 Arjan de Haan and Ward Warmerdam 11. China in Africa: Impacts and Prospects for Accountable Development 279 Giles Mohan Bibliography 305 Index 369 xiii List of Figures 1.1 Thinking about the politics of inclusive development: a relational approach 30 2.1 Transition paths between growth phases 37 2.2 The evolution of political and economic institutions in Acemoglu and Robinson 44 2.3 Institutional change in Acemoglu and Robinson 46 3.1 Causal links in a model of aid, expenditure, and taxation 82 4.1 A schema for analysing political settlements, coalitions, and the politics of resource extraction 94 xiv List of Tables 3.1 Tax ratios by income category 78 5.1 Case studies of the politics of what works 123 6.1 An incremental framework for understanding the influence of politics on social assistance in developing countries 152 6.2 Similarities in political apparatus of social assistance delivery in case countries 167 6.3 Differences in political apparatus of social assistance delivery in case countries 168 8.1 Case-study selection matrix 205 8.2 Factors that enabled women’s participation and representation in political processes and institutions in case-study countries 225 9.1 How ethnicity affects state capacity: causal mechanisms 233 9.2 Causal mechanism set (A): actions by ethnic groups 238 9.3 Causal mechanism set (B): actions by other collective actors 245 9.4 Causal mechanism set (C): institutional change 252 11.1 A framework for assessing the impact of China on sub-Saharan Africa 282 11.2 Political impacts framework 285 11.3 Political impacts framework with indicative case studies 291 xv List of Abbreviations ACA Association of Water Committees (Angola) AIM Alternative Investment Market, part of London Stock Exchange APPP Africa Power and Politics Programme AR Acemoglu and Robinson ARENA Nationalist Republican Alliance (El Salvador) Busan HLF Busan High-Level Forum (South Korea) CADFund China–Africa Development Fund CAFTA-DR US-Central American Free Trade Agreement CAITEC Chinese Academy of International Trade and Economic Cooperation CEDAW Convention on Elimination of All Forms of Discrimination CEPAL Economic Commission for Latin America CFG Community Forest Groups CFS Centre for the Future State CIF China International Fund CNPC Chinese National Petroleum Company CPA Comprehensive Peace Agreement (Sudan) CPC-ID Communist Party of China’s International Department CPP Convention People’s Party (Ghana) CSG Child Support Grant (South Africa) CSO Civil Society Organization CSR Corporate Social Responsibility CSRC Crisis States Research Centre CSWI Commission on the Status of Women (India) DAC Development Assistance Committee DFID Department for International Development (UK) EAM East Asian Model EFA Education for All EGDI Expert Group on Development Issues (Sweden) List of Abbreviations xvi EITI Extractive Industries Transparency Initiative ELF Ethnolinguistic Fragmentation EPRDF Ethiopian Peoples’ Revolutionary Democratic Front ESID Effective States and Inclusive Development FDI Foreign Direct Investment FISP Farm Input Subsidy Programme (Malawi) FMLN Farabundo Martí National Liberation Front (El Salvador) FOCAC Forum on China–Africa Cooperation FRIDE Foundation for International Relations and Foreign Dialogue GEG Global Economic Governance Programme GNI Gross National Income GNPOC Greater Nile Petroleum Operating Company GRN Gabinete de Reconstrução Nacional (Angola’s Reconstruction Office) ICMM International Council on Mining and Metals ICRG International Country Risk Guide ICSD Integrated Child Development Scheme (India) ICSID International Centre for the Settlement of Investment Disputes IDS Institute of Development Studies (UK) IFAD International Fund for Agricultural Development IFC International Finance Corporation IFI international financial institution IFPRI International Food Policy Research Institute ILGI informal local governance institution ILO International Labour Organization IMF International Monetary Fund JFM Joint Forest Management Groups (India and Nepal) KDP Kecamatan Development Program (Indonesia) LBC Licensed Buying Companies (Ghana) LDC less developed country/ies MDG Millennium Development Goal MEMVR Routine Road Maintenance Microenterprise (Peru) MMCP Making the Most of Commodities Programme MOFCOM The Ministry of Commerce of the Government of the People’s Republic of China MOU Memorandum of Understanding NAFTA North American Free Trade Agreement List of Abbreviations xvii NDC National Democratic Congress, formerly PNDC (Ghana) NGO non-governmental organization NIF National Islamic Front (Sudan) NREGA National Rural Employment Guarantee Act (India) NRM National Resistance Movement (Uganda) NSAP National Social Assistance Programme (India) ODI Overseas Development Institute PBF Performance-Based Financing initiative PCR Rural Roads Program (Peru) PDS Public Distribution Scheme (India) PNDC Provisional National Defence Council, later NDC (Ghana) PRSP Poverty Reduction Strategies Papers ROL Rule of Law RPC Research Programme Consortia RPF Rwandan Patriotic Front SEA Strategic Environment Assessment SERNAM Servicio Nacional de la Mujer (Chile) SEZ Special Economic Zones (Africa) SfL School for Life (Ghana) Sida Swedish International Development Cooperation Agency SME small or medium-sized enterprise SOE state-owned enterprise SPLM/A Sudan People’s Liberation Movement/Army TNC transnational corporations TSX Toronto Stock Exchange TVE township–village enterprise UNDRIP United Nations Declaration on the Rights of Indigenous Peoples UPA United Progressive Alliance (India) VDC Village Development Committees (Malawi) WDR World Development Report WHO World Health Organization WID Women in Development xviii List of Contributors Armando Barrientos is Professor and Research Director at the Brooks World Poverty Institute at the University of Manchester in the UK. He is also co-director of the International Research Initiative on Brazil and Africa. His research interests focus on the linkages existing between welfare programmes and labour markets in developing countries, and on policies addressing poverty, vulnerability, and population ageing. His most recent book is Social Assistance in Developing Countries (Cambridge University Press, 2013). Anthony Bebbington is Higgins Professor of Environment and Society and Director of the Graduate School of Geography, Clark University, USA. He is also a Research Associate of the Centro Peruano de Estudios Sociales, Peru and a Professorial Research Fellow at the University of Manchester. His work addresses the political ecology of rural change, with a particular focus on extractive industries and socio-environmental conflicts, social movements, indigenous organizations, and livelihoods, particularly in South and Central America. His most recent book is Subterranean Struggles: New Dynamics of Mining, Oil and Gas in Latin America (University of Texas Press, 2013) with Jeffrey Bury. Badru Bukenya is a development analyst and practitioner. He completed his PhD at the Institute of Development Policy and Management (IDPM) and then worked as a Research Associate with the Effective States and Inclusive Development Research Centre (ESID), both at the University of Manchester. He is currently a lecturer in the department of Social Work and Social Administration at Makerere University Kampala. He has previously worked with Uganda’s largest NGO, The AIDS Support Organisation (TASO). His research focuses on the politics of civil society, service delivery, social pro- tection, state-building, and citizenship formation in Africa. Deval Desai is a research associate at the School of Oriental and African Studies (SOAS), University of London. He also works with the World Bank on justice and equity for the poor, where he helped establish a justice and conflict programme. He currently advises the UN on rule-of-law issues in the post-2015 Agenda, and is an invited member of the UN roster of experts on the rule of law and legal empowerment. He has published on these issues in a range of academic and policy fora. He is a member of the Bar of England and Wales. Arjan de Haan is a development expert who focuses on public policy and poverty in Asia. He leads the IDRC programme Supporting Inclusive Growth, based in Ottawa, Canada. He has previously worked at the Institute of Social Studies (Erasmus University Rotterdam) in The Hague, where he was convenor of the master’s programme in social policy and led the development of a database called Indices of Social Development. He has published widely and is co-editor of the Canadian Journal of Development Studies List of Contributors xix Sam Hickey is Professor of Politics and Development. He is currently the joint Director of Research within the DFID-funded Effective States and Inclusive Development (ESID) Research Centre (<http://www.effective-states.org>) and Associate Director of the Brooks World Poverty Institute. His research examines the politics of development and poverty reduction, with specific reference to sub-Saharan Africa, and has been has pub- lished extensively in the leading development studies journals. This includes work on natural resource governance, social exclusion and adverse incorporation, citizenship and participation, social movements and NGOs, the politics of social protection, and the use of political analysis in international development. Matthias vom Hau is an assistant professor of comparative politics at the Institut Barcelona d’Estudis Internacionals (IBEI). A political sociologist by training, he has a PhD from Brown University and previously held a postdoctoral fellowship at the University of Manchester. Matthias’ research is on the intersection between identity politics, state formation, and development, with a regional focus on Latin America. He has published widely on nationalism and state formation, and the historical roots of social provision and growth in the region. His current work investigates how ethnic-based collective action affects the institutional competence of states to provide public goods and promote development. Simeen Mahmud is Lead Researcher at the BRAC Institute of Governance and Development (BIGD), at BRAC University. Her past research focused on citizenship and participation, education and gender, and women’s work and empowerment in Bangladesh. She is currently working on social policy, with a focus on health and edu- cation; the construction of citizen identity and practice in difficult environments; and the effect of health and micro-credit interventions on women’s well-being. Claire Mcloughlin is a Senior Research Fellow based in the International Development Department, University of Birmingham, where she undertakes research for the GSDRC and the Developmental Leadership Programme (DLP). Her recent research has focused on the politics of service delivery, and the effects of service provision on state-building processes in post-conflict states. She is completing her doctoral research in IDD on the relationship between education and state legitimacy in Sri Lanka. Giles Mohan is Professor of International Development for the Open University. His work concerns the politics of development, particularly the intermingling of territorial scales and transnational networks. He was a handling editor of the Review of African Political Economy and a member of the editorial boards of Political Geography , Antipode , Geography Compass , and the International Development Planning Review . His most recent work concerns the role of China in African development and has been funded by a series of ESRC grants. Giles has published extensively in geography, development stud- ies, and African studies journals and has consulted for a range of BBC documentaries on issues of international development. His book, with Marcus Power and May Tan- Mullins, entitled China’s Resource Diplomacy in Africa: Powering Development? was pub- lished by Palgrave Macmillan in 2012. Zed Books published his latest book, entitled Chinese Migrants and Africa’s Development in 2014. Paul Mosley is Professor of Economics in the Department of Economics, University of Sheffield. His main research interests are in economic development, with related inter- ests in economic history, social policy, and the politics of economic policymaking. His