Contemporary aid and development policy are characterised by: (i) their promotion of market friendly and competitive economies; (ii) their support for democratization and improvement of human rights; and (iii) their insistence on ‘good governance’.
With regards to the first, the record has been patchy at best and destabilizing at worst. As for democracy, the experience has been that democratization without mature political institutions has not led to development. In fact, the success stories come from countries that are anything but competitive democracies. And ‘good governance’? Current strategies on good governance are naïve and simplistic and draw on the ‘technicist illusion’ that there is always a managerial fix to the problems facing human societies.
Development is generated, sustained and protected by politics and the state has a crucial role in this process. Politics in this sense refers to the “activities of conflict, cooperation and negotiation involved in the use, production and distribution of resources, whether material or ideal, and whether at local, national and international levels”. All development is inescapably political.
Good governance can be understood in administrative and managerial terms (as the World Bank does) or in terms of competitive democratic politics (as most Western democracies do).
The concern for ‘good governance’ rose in the late 1980s due to the experience of structural adjustment lending, the dominance of official neo-liberalism in the west, the collapse of official communist regimes and the impact of the pro-democracy movements in the developing world and elsewhere.
Structural adjustment or the encouragement of open and free competitive markets was the condition associated with western loans to developing countries during the 1980s. This was to take place through stabilization — devaluation and austerity — and adjustment — deregulation and privatisation.
Neo-liberalism, in addition to its thrust towards economic and political freedom, asserts the primacy of rights and, in its right-wing libertarian hue, expresses its hostility towards state interference. Functionally, this means an assertion of democratic politics and a slim, effective and accountable public bureaucracy. The failure of governance is due to a bloated and inefficient state apparatus and hence the need for good governance.
The collapse of the USSR left the West free to attach any conditions with its loans without fear of losing its clients to communism. But more crucially, it (the fall of the USSR) discredited the communist economic argument while confirming neo-liberal theory.
The term ‘developmental state’ was first used by Chalmers Johnson (Miti and the Japanese Miracle, 1982). He identified the pre-eminent role of the state in setting social and economic goals, the autonomy of its elite bureaucracy and the nationalist objectives, in a hostile world, geared towards competence.
The distinguishing characteristic of developmental states, then, has been that their “institutional and political objectives have been developmentally-driven, while their developmental purposes have been politically-driven”. Development, in short, has been shaped by fundamentally political factors.
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